Key IMF Demand Met As Govt Introduces New Risk Monitoring System

The federal government has fulfilled another key commitment made to the International Monetary Fund (IMF) by introducing a new monitoring framework to assess and disclose the financial risks in public-private partnership (PPP) projects, according to official documents seen by ProPakistani.

According to the Ministry of Finance, the total financial pressure on the government from PPP projects has reached Rs. 472.3 billion based on provisional estimates up to December 2025.

Under the new system, both the federation and provinces will be required to report on PPP projects every six months.

Principles

• Transparency: All PPP projects that create, or may create, fiscal exposure shall be disclosed using the standard reporting template used by the federal RMU.
• Consolidation: Federal RMU shall compile and consolidate data received from federal and provincial PPP agencies and report it under FRS.
• Accountability: Provincial PPP units retain full responsibility for project evaluation and fiscal obligations.
• National PPP Liabilities Tool: The Federal RMU shall maintain a National PPP Liabilities Tool and Dashboard, which will consolidate:
  • Project-wise summaries of fiscal exposures
  • Liability-wise breakdown (Direct, ECLs, ICLs)
  • Provincial and sectoral exposure profiles
  • Annual and contract-term nominal exposure totals
  • Outstanding funded guarantee positions

The documents revealed that PPP projects include emergency and contingent liabilities of Rs. 368 billion, while liabilities exceeding Rs. 150 billion are linked to cost escalations in development projects. Financial guarantees alone account for Rs. 104 billion of the total liabilities.

Provinces

Sindh carries the highest financial risk, with total exposure estimated at Rs. 335.6 billion. PPP projects undertaken by the federal government account for financial pressure of Rs. 90.6 billion, while liabilities from Punjab’s PPP projects stand at Rs. 26.5 billion.

Khyber Pakhtunkhwa’s PPP projects have liabilities of Rs. 19.6 billion.

Financial risks associated with PPP contracts are not immediately reflected in the annual budget, creating the potential for sudden fiscal shocks. Under the new framework, these risks and related debts will now be systematically included in official reports.

PPP contracts often involve minimum income guarantees, interest rate risks, and exposure to exchange rate fluctuations. The rising dollar and escalating project costs are identified as major sources of financial vulnerability.

Sources added that the new monitoring system has been introduced to better anticipate and manage these risks, avoid unexpected financial shocks, and strengthen compliance with IMF-backed fiscal reforms.