Ministry of Finance has unveiled Pakistan’s first Fiscal Risk Monitoring Framework (FRMF) designed to track contingent liabilities arising from Public–Private Partnership projects. The framework provides a structured mechanism to monitor financial exposure linked to PPP contracts at both federal and provincial levels, offering a clearer view of government obligations that may not be immediately visible in budgets. According to Ministry officials, total fiscal exposure related to PPPs currently stands at around Rs. 472.3 billion, including Rs. 368.3 billion in contingent liabilities and Rs. 104 billion in funded financial guarantees as of December 2025.
Developed by Debt Management Office, FRMF establishes a uniform system for identifying, measuring, and reporting both direct and contingent liabilities. These obligations, which include minimum revenue guarantees, interest rate adjustments, and termination payments, carry potential fiscal risk if triggered in the future. By standardizing assessment and disclosure across all government levels, the framework allows authorities to better manage fiscal exposure and reduces the likelihood of unexpected financial shocks. The disclosure currently covers 36 qualified PPP projects across the federal government and all four provinces, with Sindh accounting for the largest share at Rs. 335.6 billion, followed by the federal government at Rs. 90.6 billion and Punjab at Rs. 26.5 billion.
Under the new system, PPP units at federal and provincial levels are required to submit bi-annual reports detailing both direct and contingent liabilities. The framework introduces a probability-based classification, categorizing each liability as low, medium, or high likelihood, which enhances transparency and provides policymakers with actionable insights. Officials emphasized that these measures will support medium-term financial planning, allowing authorities to anticipate potential fiscal pressures and allocate resources more effectively. Plans are also underway to develop a National PPP Liabilities Dashboard, which will offer a comprehensive view of project-wise, provincial, and sectoral exposures.
By implementing FRMF, Ministry of Finance aims to strengthen fiscal discipline, ensure timely disclosure of potential liabilities, and improve oversight of PPP projects across the country. The framework represents a step toward integrating risk monitoring into routine financial management, enabling both federal and provincial governments to make informed decisions regarding future projects. Analysts and officials believe that the initiative will not only enhance accountability but also provide investors and stakeholders with greater confidence in Pakistan’s approach to managing fiscal risks associated with public-private partnerships.Follow the SPIN IDG WhatsApp Channel for updates across the Smart Pakistan Insights Network covering all of Pakistan’s technology ecosystem.
