FIDIC Silver Book (EPC/Turnkey)

The FIDIC Silver Book is the informal name for the FIDIC Conditions of Contract for EPC/Turnkey Projects. It is designed for contracts where a single contractor takes on full engineering, procurement, and construction (EPC) responsibility, delivering a completed and operational facility at a fixed price by a fixed date, with minimal employer involvement in the construction process.

What is the FIDIC Silver Book?

The Silver Book represents the most contractor-risk-intensive of the FIDIC suite. The contractor bears virtually all risk: design risk, ground conditions risk, quantity risk, performance risk, and the risk of unforeseen circumstances. In exchange, the employer receives a high degree of price and schedule certainty - which is the principal attraction of the EPC/turnkey model for procuring entities who want to avoid construction-phase management complexity and cost uncertainty.

The Silver Book differs from the fidic-yellow-book in several important respects: there is no independent engineer, the employer's representative has a more limited role, the contractor has greater autonomy over construction methods, and the contractor's entitlement to claim extra time or money for unforeseen conditions is very restricted. Payment is typically lump sum against milestones, and the contractor's performance warranty at completion is absolute - the plant or facility must function as specified, regardless of how it was designed or built.

Why the FIDIC Silver Book matters for bidders

The Silver Book is used for large infrastructure and industrial projects - power generation, desalination, toll roads, LNG facilities - where the procuring entity is typically a government or a state-owned enterprise seeking price certainty. For contractors, the Silver Book requires more rigorous pre-bid due diligence than any other FIDIC form. Because ground conditions risk and quantity risk are fully borne by the contractor, preliminary site investigation, geotechnical assessments, and quantity validation are essential inputs to an accurate lump-sum price. Contractors who treat Silver Book tenders like remeasured fidic-red-book contracts and price against assumed quantities without thorough site investigation routinely encounter severe losses in execution.

FAQ

Does the Silver Book have an independent engineer?

No. The Silver Book does not provide for an independent engineer in the traditional FIDIC sense. The employer's representative (sometimes called the employer's agent) represents the employer's interests and does not make impartial determinations. Disputes go directly to the Dispute Adjudication Board or arbitration.

Is the Silver Book used on World Bank or ADB projects?

Development banks have historically been cautious about the Silver Book because its extreme risk allocation toward the contractor can undermine competition and affordability in their borrowing countries. It is used in some large infrastructure PPP transactions and in Gulf SOE procurement, but it is not the standard form for MDB-financed contracts, where the Red or Yellow Book (or derivatives) are more common.

What is meant by "turnkey" in the Silver Book's title?

Turnkey means the contractor delivers a facility ready to operate: the employer metaphorically turns the key and the plant runs. The contractor is responsible for everything from detailed design through to commissioning, performance testing, and handover of a functioning facility.