On January 20, 2026, the Parties involved in the Pakistan Khyber Pass Economic Corridor Project (P159577) case – the Government of Pakistan (the Borrower), represented by the National Highway Authority and the Government of Khyber Pakhtunkhwa, and the affected communities (the Requesters), living in the Khyber Pakhtunkhwa Province, with their own representation structure, – signed a Dispute Resolution Agreement. The Parties reached a mutually satisfactory agreement within the stipulated period and have chosen to keep this Agreement confidential. At their request, the World Bank Accountability Mechanism’s Dispute Resolution Service (DRS) will monitor the implementation of the Agreement. This agreement concludes the dispute resolution process that has been facilitated by the DRS since November 14, 2024.
The objective of this World Bank-financed project is to expand economic activity between Pakistan and Afghanistan by improving regional connectivity and promoting private sector development along the Khyber Pass corridor. The complaint, submitted by 448 individuals from the Khyber Pakhtunkhwa Province, raised concerns specific to the design and route alignment of the Southern Link Road (SLR), a new four-lane road planned as part of the project. The Inspection Panel recommended an investigation of three broad areas of potential harm: livelihood impacts, lack of meaningful consultations with Project-affected communities, and conflict risk. After the Parties accepted the Dispute Resolution offer made by Orsolya Székely, the Head of DRS, the DRS supported them in examining each issue and identifying mutually acceptable solutions, ultimately leading to the signing of the Dispute Resolution Agreement.
This Agreement was signed following a 6-month extension of the original one-year timeline. An interim agreement, signed on November 13, 2025, partially addressed certain eligible issues in the case and is superseded by this final Dispute Resolution Agreement.
The Parties set out a methodology for calculating land compensation for Project-Affected People (PAPs), with arrangements for shared ownership and cases involving informal transfers. Consistent with applicable Pakistani law, land acquisition will follow a specified transparent process, and compensation will be determined and structured to meet World Bank standards. The Agreement includes assurances regarding the livelihood restoration plan for those affected by the Project, and specific measures for women PAPs—facilitating access to compensation, training, and employment opportunities. In response to community concerns, avoidance of graveyards will be considered where design parameters permit. If land acquisition has not commenced by a specified date, existing Section 4 land acquisition notifications will be lifted. Implementation will follow a time-bound plan with public information sessions, measures to ensure women’s participation, and systematic progress sharing. At the request of the Parties, the DRS will monitor the implementation of the Agreement for a maximum period of one year from the date of its signature, unless otherwise extended by both parties. Székely informed the World Bank Board of Executive Directors of the signature of the DR Agreement and the conclusion of the DR process on January 29, 2026.
Case No. 24/04/DRS
