ISLAMABAD: Sindh accounts for the largest share of the country’s contingent liabilities arising from public-private partnership (PPP) projects, with total nationwide exposure exceeding Rs472 billion by the end of December 2025, according to the Ministry of Finance.
In its first-ever Fiscal Risk Monitoring Framework for Contingent Liabilities of PPP Projects, prepared in line with commitments made to the International Monetary Fund (IMF), the ministry’s Debt Management Office reported cumulative contingent liabilities of Rs472.3bn across the federal and provincial governments. These liabilities stem from contractual obligations under PPP arrangements that may materialise in the future.
Sindh alone accounts for more than 71 per cent of the total, or Rs335.6bn, reflecting its extensive portfolio of 17 PPP projects — nearly half of the 36 projects implemented nationwide. The province’s large exposure is attributed to guarantees and risk-sharing mechanisms built into its PPP contracts.
You May Also Like: Pakistanis Stranded in Afghanistan Urge Reopening of Border
The federal government follows with contingent liabilities of Rs90.6bn, representing about 19.3 per cent of the total. Punjab’s liabilities stand at Rs26.5bn, or 5.6 per cent, while Khyber Pakhtunkhwa’s exposure is estimated at Rs19.6bn, equivalent to 4.2 per cent. Balochistan, despite having five PPP projects, reported no contingent liabilities under the framework.
According to the report, Rs368.3bn of the total liabilities relate to potential fiscal obligations such as minimum revenue guarantees, cost escalation, interest rate variations and termination-related payments. The remaining Rs104bn consists of financial guarantees issued by governments in support of PPP projects.
The report suggests Sindh’s direct contingent liabilities because of cost escalation, minimum revenue guarantee and terminal liabilities stand at Rs255.5bn.https://t.co/dxD3dfTkKD
— Dawn Business (@dawn_business) January 6, 2026
Sindh’s direct contingent liabilities linked to cost escalation, minimum revenue guarantees and terminal liabilities amount to Rs255.5bn, accounting for nearly 70 per cent of the national total in this category. The province’s largest exposure arises from cost escalation risks, estimated at Rs146.6bn, followed by Rs61bn in minimum revenue guarantees to private partners. These are in addition to financial guarantees estimated at around Rs80bn.
The federal government’s PPP liabilities mainly comprise Rs83.7bn in termination-related obligations, along with Rs7bn in financial guarantees. Financial guarantees typically support commitments such as viability gap funding and other agreed public-sector contributions.
The report categorised several components of these liabilities as “high risk”, including cost escalation and termination liabilities estimated at around Rs150bn each, financial guarantees of Rs104bn, and minimum revenue guarantees of approximately Rs66bn, largely driven by Sindh’s exposure.
The monitoring framework fulfils a key IMF programme requirement to systematically identify, quantify and report fiscal risks associated with PPP projects at both federal and provincial levels. The Ministry of Finance noted that PPP contracts can create off-budget exposures that may not be immediately reflected in fiscal or debt statistics but could crystallise over time.
Under the new framework, a uniform methodology has been adopted to consolidate all PPP-related contingent liabilities into a single national dataset, managed by the Risk Management Unit of the Ministry of Finance, to strengthen fiscal transparency and oversight.
Check out our latest video:
