Sindh Leads in PPP Liabilities, Exceeding Rs472 Billion Nationally
Sindh province has emerged as the principal contributor to Pakistan’s burgeoning contingent liabilities stemming from public-private partnership (PPP) projects, with the national total surpassing Rs472 billion by the close of December 2025. This significant figure, detailed in the Ministry of Finance’s inaugural “Fiscal Risk Monitoring Framework for Contingent Liabilities of PPP Projects,” underscores a critical fiscal area.
The report, compiled by the Debt Management Office in accordance with IMF commitments, reveals that over 71% of the total Rs472.3 billion in liabilities is attributable to Sindh. This substantial portion, amounting to Rs335.6 billion, is linked to the province’s extensive portfolio of 17 PPP projects, representing nearly half of the 36 projects operating nationwide.
Sindh’s Dominance in PPP Liabilities
Sindh’s direct contingent liabilities, encompassing cost escalation, minimum revenue guarantees, and terminal liabilities, stand at Rs255.5 billion. This figure constitutes nearly 70% of the consolidated national amount of Rs368.3 billion for these categories.
The largest component of Sindh’s exposure relates to cost escalation, estimated at Rs146.6 billion. An additional Rs61 billion is tied to minimum revenue guarantees provided by the provincial government to private partners. Beyond these, approximately Rs80 billion in financial guarantees adds to Sindh’s fiscal risk. SindhNews.com has been closely monitoring the developments in provincial fiscal management.
Federal and Provincial Contributions to PPP Liabilities
In contrast, the federal government’s total contingent liabilities for PPP projects are Rs90.6 billion, or 19.3% of the cumulative sum. Punjab follows with Rs26.5 billion (5.6%), and Khyber Pakhtunkhwa reports Rs19.6 billion (4.2%). Balochistan, despite having five projects within the national portfolio, currently has no recorded contingent liabilities.
The federal government’s Rs90.6 billion includes Rs83.7 billion attributed to termination liabilities and Rs7 billion in financial guarantees. These guarantees are issued for financial commitments made by the public sector, such as viability gap financing support. SindhNews.com notes the increasing reliance on such mechanisms.
Managing PPP Fiscal Risks
The Ministry of Finance, through its Risk Management Unit (RMU), is actively working with stakeholders to establish a framework for quantifying these contingent liabilities. Finance Minister Muhammad Aurangzeb reiterated the commitment to subjecting PPP-funded projects to rigorous selection criteria, akin to those for other funding sources, as part of the IMF program.
These contingent liabilities, which are contractual obligations where the state assumes risks for PPP projects, can materialize through guarantee calls, revenue support mechanisms, or termination payments. The newly established framework aims to provide a consistent methodology for identifying, quantifying, and reporting these exposures at both federal and provincial levels, ensuring greater fiscal transparency.
The implementation of this rigorous monitoring framework is expected to enhance the management of fiscal risks associated with the growing PPP sector across Pakistan, providing a clearer picture of potential future financial obligations.