Pakistan’s total contingent liabilities arising from public-private partnership (PPP) projects exceeded Rs472 billion by the end of December 2025, with Sindh accounting for more than 70% of the exposure, the Ministry of Finance’s Debt Management Office revealed in its first-ever Fiscal Risk Monitoring Framework for Contingent Liabilities of PPP Projects.Â
The framework was developed in line with commitments made under the International Monetary Fund (IMF) programme.
Sindh emerged as the largest contributor, with contingent liabilities amounting to Rs335.6 billion, or over 71% of the national total. The province also has the largest PPP portfolio, with 17 projects out of the 36 qualifying PPP projects nationwide.
The federal government’s contingent liabilities stood at Rs90.6 billion, representing 19.3% of the total, followed by Punjab at Rs26.5 billion (5.6%) and Khyber Pakhtunkhwa at Rs19.6 billion (4.2%). Balochistan reported no contingent liabilities, although it has five PPP projects included in the national portfolio.
According to the report, Rs368.3 billion of the total exposure relates to contingent fiscal obligations that could arise from cost escalation, minimum revenue guarantees, interest rate fluctuations, or termination liabilities. An additional Rs104 billion has been classified as financial guarantees.
Sindh’s exposure is largely driven by cost escalation and minimum revenue guarantees. The province’s contingent liabilities from cost escalation alone were estimated at Rs146.6 billion, followed by Rs61 billion in minimum revenue guarantees and significant termination-related obligations. These are in addition to around Rs80 billion in financial guarantees.
For the federal government, PPP-related liabilities included Rs83.7 billion in termination liabilities and Rs7 billion in financial guarantees. Financial guarantees typically cover commitments such as viability gap funding and other agreed public sector support.
The framework also assessed the likelihood of contingent liabilities materialising, flagging a high risk for cost escalation and termination liabilities of around Rs150 billion each, Rs104 billion linked to financial guarantees, and approximately Rs66 billion tied to minimum revenue guarantees, largely driven by Sindh.
The Finance Ministry said the framework was introduced to establish a consistent system for identifying, quantifying, and reporting fiscal risks associated with PPP projects at both federal and provincial levels. PPP contracts can create obligations that do not immediately appear in budget or debt figures but may later materialise through guarantee calls, indexation adjustments, or termination payments.
