Pakistan’s total contingent liabilities linked to public-private partnership (PPP) projects crossed Rs472 billion by the end of December 2025, with Sindh accounting for the largest share. The figures were disclosed by the Ministry of Finance in its first comprehensive fiscal risk framework for PPP projects.
According to the Debt Management Office, total contingent liabilities stood at Rs472.3bn across the federal government and the four provinces. More than 71 per cent of this amount, or Rs335.6bn, was attributed to Sindh, which also holds the largest PPP portfolio with 17 out of 36 projects nationwide.
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The federal government’s contingent liabilities were reported at Rs90.6bn, representing about 19 per cent of the total. Punjab followed with Rs26.5bn, while Khyber Pakhtunkhwa’s exposure stood at Rs19.6bn. Balochistan, despite having five PPP projects, reported no such liabilities.
The report explained that contingent liabilities arise from contractual obligations where the government bears certain risks over the life of PPP contracts. These include guarantees related to minimum revenue, cost escalation, interest rate changes, and termination payments, calculated at nominal values.
Of the total, Rs368.3bn relates to fiscal risks from cost escalation, minimum revenue guarantees, and terminal liabilities. Another Rs104bn is linked to financial guarantees issued by governments to support PPP projects, such as viability gap financing.
Sindh’s exposure remains particularly high due to cost escalation risks estimated at Rs146.6bn and minimum revenue guarantees of Rs61bn. The province also carries around Rs80bn in financial guarantees, making it the most exposed jurisdiction overall.
The framework was developed as part of Pakistan’s commitments to the International Monetary Fund. It aims to improve transparency and establish a unified system to identify, quantify, and report PPP-related fiscal risks at both federal and provincial levels.
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Officials noted that while these liabilities do not immediately appear in budget or debt figures, they could materialise in the future. The new framework is intended to help authorities better manage and monitor these potential fiscal pressures.