The government has fulfilled another key commitment made to the International Monetary Fund by introducing a Fiscal Risk Monitoring Framework, unveiling the scale of financial risks tied to public-private partnership (PPP) projects across the country.
According to the Ministry of Finance, the newly launched system will assess and monitor the financial risks arising from PPP projects. Under the framework, the federation and all provinces will now submit detailed reports on PPP projects every six months, marking a major shift toward transparency.
PPP liabilities cross Rs472bn
Official documents show that the total contingent liabilities from PPP projects have exceeded Rs472 billion, placing significant financial pressure on the government. These figures are based on provisional estimates up to December 2025, the ministry confirmed.
Of the total amount, Rs368 billion has been classified as emergency or contingent liabilities under PPP contracts. In addition, more than Rs150 billion has been added due to cost escalations in development projects, highlighting rising fiscal stress.
Financial guarantees, key risk factors
The Ministry of Finance said financial guarantees account for Rs104 billion of the total liabilities. PPP contracts also carry risks linked to minimum income guarantees, interest rate fluctuations, dollar appreciation, and rising project costs, all of which could amplify government exposure.
The framework compiled financial risk data from 36 PPP projects across Pakistan, providing the first consolidated national snapshot of PPP-related fiscal pressure.
Officials noted that these risks were previously not immediately reflected in the federal or provincial budgets.
Sindh bears highest financial risk
According to the report, Sindh carries the highest PPP-related financial risk, with liabilities totaling Rs335.6 billion. This far exceeds the exposure of other regions, making Sindh the most vulnerable province under PPP arrangements.
The federal government’s PPP projects account for Rs90.6 billion in financial pressure, the documents show. In comparison, Punjab has PPP liabilities amounting to Rs26.5 billion, significantly lower than Sindh.
Risks to be formally reported going forward
The Ministry of Finance stated that under the new system, financial risks and potential debt from PPP projects will now be formally included in fiscal reports.
This step is aimed at preventing unexpected financial shocks and strengthening long-term budget planning.
Officials said the Fiscal Risk Monitoring Framework was introduced to improve early detection of fiscal stress and align Pakistan’s reporting standards with international best practices.
The move is expected to enhance transparency, support IMF program requirements, and help policymakers better manage Pakistan’s growing development financing needs.
