The Emerald Book: contracts for underground works and geo-risk

Underground construction is a world of its own. The ground cannot be seen in full in advance, and its behaviour drives cost and time more than any other factor. For such projects FIDIC, together with the International Tunnelling Association (ITA), released the Emerald Book — Conditions of Contract for Underground Works (1st ed., 2019).

The problem of geological risk

In ordinary contracts, unforeseen ground conditions breed endless disputes: the contractor prices in a huge contingency “just in case” (and the project becomes more expensive), or takes the risk cheaply and goes bankrupt on claims. Neither outcome is good.

The solution: the Geotechnical Baseline Report (GBR)

The Emerald Book’s key innovation is the Geotechnical Baseline Report (GBR). It is a document that sets an agreed “baseline” of expected ground conditions. The logic:

• if actual conditions are within the baseline — the Contractor bears the risk (it priced this in);
• if conditions are worse than the baseline — this is treated as changed risk, and the Contractor is entitled to an adjustment of time and cost.

The GBR turns “unforeseen conditions” from a source of disputes into a managed, pre-allocated risk.

How this changes the contract

• Payment and time are tied to actual ground parameters relative to the GBR.
• The incentive to price in an excessive contingency is reduced — tenders become fairer.
• Disputes over “who is to blame for the ground” move into a measurable domain.

Where to use it

The Emerald Book is aimed at:

• metros and transport tunnels;
• hydraulic and utility tunnels;
• other underground structures with high geological uncertainty.

For Uzbekistan and the region this is especially relevant for metro development and tunnel sections of mountain highways.

Conclusion

The Emerald Book is an example of how FIDIC adapts its core risk-allocation logic to the specifics of the works. Where the main risk is the ground, the GBR gives the parties a common, measurable language. You can compare the Emerald Book with the rest in the interactive suite. Preparing an underground project? Discuss the contract form with our experts.