Introduction
The Silver Book was FIDIC's response to market demands for
greater risk security and cost and time certainty in construction
projects. It seeks to mitigate the effects of delays and unexpected
costs, and it allocates risk to a single entity, which makes it
favourable to Lenders. Although controversial, the Silver Book is
now commonly used in project financed construction projects.
The Silver Book has become synonymous with 'power'
projects which involve a complex interaction between government,
project companies, Lenders and Contractors, as well as the
project's long term operation and maintenance. Inflexible
budget requirements and a fixation on return on investment have led
to a market preference for fixed, lump-sum contract prices that do
not increase – even if unexpected circumstances arise, and
even if it means an inflated contract price to cover these
risks. The Silver Book is generally perceived as one-sided,
and Contractors look upon it with
