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The FIDIC Silver Book: EPC and Turnkey Contracts

The Silver Book is FIDIC’s EPC/turnkey form. It departs from the traditional FIDIC principle of balanced risk allocation, placing most project risk on the Contractor in return for price and time certainty for the Employer. Used with care, it is the right form for privately financed projects where lenders require certainty. Used without care, it creates claims that are difficult for either party to win.

10 min read · Updated 23/04/2026

In this article

1. What the Silver Book is and when it is used
2. Why FIDIC departed from balanced risk allocation
3. Risk allocation under the Silver Book
4. Contractor protections within the Silver Book
5. Extension of Time under the Silver Book
6. Silver Book compared with the Yellow Book
7. Using the Silver Book in UAE practice

Key takeaway

The Silver Book gives the Employer the price and time certainty lenders demand on privately financed projects. It does so by placing risk on the Contractor — including the accuracy of the Employer’s data, unforeseeable physical conditions and design co-ordination. Before selecting the Silver Book, both parties should satisfy themselves the project genuinely warrants this allocation. For conventional UAE works without project-finance drivers, the Yellow Book is typically the more appropriate choice.

1. What the Silver Book is and when it is used

The FIDIC Silver Book — Conditions of Contract for EPC/Turnkey Projects — was published in September 1999 as part of the first coherent FIDIC suite. The Second Edition followed in 2017. It is drafted for engineering, procurement and construction (EPC) projects where the Contractor takes responsibility for the design, engineering, procurement, construction, testing and commissioning of the works, delivering a completed facility ready for operation.

The Silver Book is the FIDIC form most closely associated with project finance. Where a lender is providing long-term debt against the future revenues of the project, the lender typically requires price and time certainty. The Silver Book delivers this by transferring risks that, under the Yellow Book, would be shared or retained by the Employer. In return, the Employer expects — and ordinarily pays for — a higher tendered price, reflecting the larger risk premium the Contractor prices into the bid.

Typical UAE applications include:

• Independent power and water projects procured through build-own-operate or similar financing.
• Process plants and industrial facilities procured by private developers with debt financing.
• Major infrastructure where the Employer’s Requirements are well-defined and the Contractor has genuine freedom on design.

The Silver Book is not appropriate where the scope is ill-defined, where the Employer wishes to retain design control, or where the Contractor lacks the capacity to price and manage the transferred risk. Mis-selection is one of the recurring root causes of large disputes under this form.

2. Why FIDIC departed from balanced risk allocation

FIDIC’s traditional position — embodied in the Red and Yellow Books — is that the Contractor takes the risks it can reasonably estimate at tender, and the Employer takes risks that cannot reasonably be reckoned in advance. This is the balanced-risk principle for which FIDIC drafting is known. On the conventional model, the Employer pays extra only when an unforeseen event actually arises, rather than paying a risk premium built into every tender.

The Silver Book departs from this principle deliberately. FIDIC recognised that a distinct market had developed for EPC/turnkey procurement where the Employer — typically a project-finance vehicle — needed price and time certainty above all else. The Silver Book was published to serve that market.

FIDIC’s own guidance on the Silver Book cautions that it should not be used where:

• There is insufficient time or information for tenderers to fully scrutinise the Employer’s Requirements.
• Construction involves substantial work underground or work in areas the Contractor cannot inspect.
• The Employer intends to supervise the Contractor’s work closely or review the majority of the design.
• Interim payments are to be made based on detailed measurement.

These cautions are well-placed. Where they are ignored, the Silver Book produces large claims — most often in respect of unforeseen ground conditions, defects in Employer-supplied data, and scope ambiguity in the Employer’s Requirements.

3. Risk allocation under the Silver Book

The table below summarises the principal risks the Silver Book allocates to the Contractor, compared to the treatment under the Yellow Book.

The most consequential transfer is Sub-Clause 4.10 on Silver Book projects. The Contractor is deemed to have obtained all necessary information on risks, contingencies, and circumstances affecting the works. Combined with the absence of a counterpart to Yellow Sub-Clause 4.12, this means Silver Book Contractors carry ground condition risk — a position that routinely produces disputes where conditions encountered differ materially from those anticipated.

4. Contractor protections within the Silver Book

Commentary on the Silver Book sometimes omits the protections FIDIC built in for the Contractor. These are worth setting out because they are often the basis of defensive positions for Contractors in dispute:

• Evidence of financial arrangements — Sub-Clause 2.4 entitles the Contractor to request, within 28 days, reasonable evidence that the Employer has made and is maintaining financial arrangements sufficient to pay the Contract Price. Material changes to those arrangements must be notified.
• Constraints on Employer claims — Sub-Clause 2.5 requires the Employer to give notice and particulars of any claim, and prohibits set-off or deduction except in accordance with the sub-clause. This places the Employer on the same notice footing as the Contractor.
• Changes in Laws — Sub-Clause 13.7 gives the Contractor a price adjustment for changes in legislation, and under the 2017 edition, for changes in official governmental interpretation of laws.
• Financing charges on late payment — Sub-Clause 14.8 provides for compound financing charges at three percentage points above the central bank discount rate if the Employer fails to pay on time. Under the 1987 Red Book, the calculation basis was unclear; the Silver Book resolves this.
• Right to suspend — Sub-Clause 16.1 entitles the Contractor to suspend or reduce the rate of work where the Employer fails to provide evidence of financial arrangements or fails to pay. This is a broader right than existed under the 1987 Red Book.
• DAB then arbitration — the dispute resolution regime under Clause 20 (1999) / Clauses 20 and 21 (2017) provides a tiered process starting with the Dispute Adjudication Board or Dispute Avoidance/Adjudication Board, progressing to arbitration if the decision is not accepted.

5. Extension of Time under the Silver Book

EOT entitlement under the 1999 Silver Book is addressed in Sub-Clause 8.4. The grounds are substantially similar to those under the Yellow Book but with one significant omission: there is no equivalent of the Yellow Book’s Sub-Clause 4.12 (Unforeseeable Physical Conditions). Silver Book Contractors therefore cannot claim time or cost for differing site conditions.

The principal grounds available to the Silver Book Contractor are:

• Variations instructed by the Employer.
• Causes of delay specifically giving entitlement to EOT under the Conditions (including delayed access under Sub-Clause 2.1, changes in Laws under Sub-Clause 13.7, and Exceptional Events under Clause 18 of the 2017 edition).
• Exceptionally adverse climatic conditions (though this ground is sometimes deleted in the Particular Conditions).
• Unforeseeable shortages of personnel or goods caused by epidemic or governmental action.
• Delay, impediment or prevention caused by or attributable to the Employer.

The notice procedure in Sub-Clause 20.1 (1999) / Sub-Clause 20.2 (2017) applies without material modification. The 28-day notice rule and the 42-day or 84-day particulars rule are the same as under the Yellow Book. The interaction between Silver Book risk transfer and the notice regime is the source of many claims — a Contractor who has taken a broad risk can still be defeated by a late notice on the narrow ground that remains available.

6. Silver Book compared with the Yellow Book

For UAE procurement choosing between the two design-build forms, the decision framework is reasonably settled:

Where the wrong form has been chosen, rescue mechanisms include well-drafted Particular Conditions restoring elements of the balanced allocation, or bespoke supplemental agreements during execution. Neither is a substitute for the right starting point.

7. Using the Silver Book in UAE practice

Three points recur in UAE expert-witness work on Silver Book contracts:

First, the quality of the Employer’s Requirements is decisive. On Silver Book projects, Employer’s Requirements that are ambiguous, incomplete or internally contradictory produce disputes that neither party can resolve at the site level. Investment in precise, technically coherent Employer’s Requirements before tender is the single most effective risk-management measure an Employer can take.

Second, time-bar discipline is critical. Silver Book Contractors who have accepted broad risk transfer often assume that entitlement is narrow across the board. In practice, the grounds that do remain — Employer delay, variations, changes in Law — are more valuable precisely because they are narrow. Timely notice under Sub-Clause 20.1 (1999) or 20.2 (2017) preserves that entitlement. Missed notice loses it, regardless of merit.

Third, dispute resolution under Clause 20 (1999) or Clause 21 (2017) proceeds through the DAB or DAAB to arbitration. On UAE projects, the governing law and seat need to be considered at the drafting stage. Federal Arbitration Law No. 6 of 2018 provides the framework for UAE-seated arbitration, with DIAC and ADCCAC as the principal institutions. DIFC or ADGM seats introduce their own arbitration laws and supervisory court regimes.

Our FIDIC expert-witness practice supports UAE law firms and parties on Silver Book matters across these stages — from pre-contract form selection through to arbitration evidence.

This article provides general information on the FIDIC Silver Book and is not legal advice. For jurisdiction-specific matters under UAE law, a UAE-qualified legal practitioner should be consulted.

Silver Book advice from pre-contract to arbitration

E-Basel advises on Silver Book form selection, Employer’s Requirements review, claims preparation, and expert-witness engagements across UAE EPC projects. Our work is independent and grounded in the standard contemporary practice standards.

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