The government of Pakistan has launched a Fiscal Risk Monitoring Framework to track financial risks from public-private partnership (PPP) projects. This step fulfills a key commitment to the International Monetary Fund (IMF) and aims to improve transparency in public finances.
According to the Ministry of Finance, the new framework will assess and monitor risks arising from PPP projects across Pakistan. Under the system, the federal government and all provinces must submit detailed reports on PPP liabilities every six months. Officials said this represents a major step toward systematic fiscal monitoring.
Documents show that total contingent liabilities from PPP projects have crossed Rs472 billion. Of this, Rs368 billion is classified as emergency or contingent liabilities under PPP contracts. Additionally, over Rs150 billion has been added due to cost escalations in ongoing development projects, highlighting rising fiscal pressure.
Financial guarantees account for Rs104 billion of the total exposure. Other risks include minimum income guarantees, interest rate fluctuations, dollar appreciation, and increasing project costs. These factors could further amplify Pakistan’s fiscal exposure, officials warned.
The framework gathered data from 36 PPP projects nationwide. It provides Pakistan’s first consolidated picture of financial risks linked to PPPs. Previously, these liabilities were not fully reflected in federal or provincial budgets, making the framework a critical tool for early detection of fiscal stress.
The report identifies Sindh as the province with the highest PPP-related financial risk, totaling Rs335.6 billion. The federal government faces Rs90.6 billion in PPP obligations, while Punjab’s exposure stands at Rs26.5 billion.
Under the new system, Pakistan will formally report all potential debt and financial risks from PPP projects in fiscal statements. Officials said this measure will prevent unexpected financial shocks, strengthen long-term budget planning, and align reporting standards with international best practices.
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The Fiscal Risk Monitoring Framework is expected to boost transparency, support IMF program requirements, and help policymakers manage Pakistan’s growing development financing needs more effectively.
