What handover costs the owner who inherits it

An asset is handed over twice. Once on paper, when the certificate is signed and the documents are accepted. Then again months later, when somebody in operations needs to know something nobody wrote down.

Most writing about handover treats this as a documentation problem and recommends better documentation. Not wrong, but it skips the question an owner should be asking, which is what the gap costs and who pays it.

That has been measured. Once, properly, more than twenty years ago, and not in this region.

The one time anyone counted

In 2004 the US National Institute of Standards and Technology published a study by Gallaher, O'Connor, Dettbarn and Gilday estimating the annual cost of inadequate interoperability in the American capital facilities industry. Interoperability here means the ability to move project and product data between firms and between systems, which in practice means whether information survives the journey from one party to the next.

The headline was $15.8 billion a year in 2002 dollars. The headline is the least interesting part.

Item	Total, $bn	Borne by owners, $bn
Planning, design & engineering	2.7	0.7
Construction	4.1	0.9
Operations & maintenance	9.1	9.0

Costs rise at every stage, and in the last one almost the whole of it falls on the owner: 9.03 of 9.09 billion, in a phase where the people who caused it were no longer present.

FIG. 01Annual cost of inadequate interoperability, by lifecycle phase. Source: NIST GCR 04-867, Table 1, as reproduced in Chapman (2005). Figures are 2002 US dollars and exclude residential buildings and transportation infrastructure.

Costs rose at every stage. Planning and design accounted for $2.7 billion. Construction, $4.1 billion. Operations and maintenance, $9.1 billion, which is more than the other two combined. Of that operations figure, $9.0 billion fell on owners and operators.

So just under three fifths of the total cost of information failing to travel showed up in a phase where the people who caused it were no longer present.

Within that $9 billion, one line dominates: $4.8 billion of what the study calls operations and maintenance information verification. Not building anything. Not fixing anything. Verifying. Owners spending money to establish whether the information they hold about their own assets is correct.

If you have watched a team walk a site with a clipboard and a drawing set, confirming whether the drawing matches the wall, you have watched this cost being incurred. It rarely appears as a budget line. It is absorbed into salaries, into consultant fees, and into the time it takes to answer a question that should have taken a minute.

Costs compound as one moves forward in the facility life cycle and their heavy costs in the O&M phase are a result of disconnects in the design and construction phases.

That is how Robert Chapman of NIST summarised what owners had concluded from the data. It inverts how handover is usually discussed. The problem is not that operators receive their documents late. It is that a decision taken during design lands on a different organisation, years later, in a different budget.

Why this matters here, now

The Gulf is taking delivery of completed assets at scale.

As completed assets move from construction to custody, the question is no longer what they cost to build but what they cost to run. Across the region, organisations built to deliver are becoming organisations that own.

Three things make the handover gap sharper here than the American data would suggest.

The information asymmetry is unusually wide. On the largest programmes, tier one contractors routinely hold more programme information than the owners paying them. That imbalance is normal during construction. It becomes a transfer problem at exactly the moment the contractor's obligation ends.

In Saudi Arabia the gap has become a reporting obligation. The Saudi Ministry of Finance describes High Order No. 13059 of December 2016 as approving the move of all government entities from cash to accrual accounting, and applies Saudi public sector accounting standards based on IPSAS. That obliges entities to recognise and value their assets, which in practice means physically locating infrastructure that may never have been recorded and putting a defensible number against it. An asset register that was a maintenance inconvenience becomes a balance sheet obligation.

The money to fix it later is less available than it was. According to press reporting that rests on unnamed sources, the Public Investment Fund approved a minimum 20% spending reduction across its portfolio at a board meeting in December 2024, and timelines on several giga-projects have been recalibrated. Remediation budgets are the easiest thing to lose in that environment, and information remediation is the easiest of those to defer, because nothing visibly breaks when you do.

Notably, none of this has been quantified regionally. There is no Gulf equivalent of the NIST study. The market with the largest current exposure to this problem is operating without a measurement of it.

What the number does and does not tell you

The study is old, and the honest reading requires saying so.

The data is from 2002 and covers the United States only. It excludes residential buildings and transportation infrastructure. The method was survey-based, comparing observed costs against a constructed scenario in which information is entered once and flows without loss, so the figure estimates a gap rather than measuring a transaction.

It also predates almost everything now offered as the answer. BIM was marginal in 2002. COBie did not exist. ISO 19650 was years away.

You could argue the number is therefore too high today. You could argue the opposite, that assets have become more instrumented and more complex since, and that there is more information to lose. Both are reasonable. Neither is settled, because no comparable exercise appears to have been repeated.

There is no shortage of recent figures about the cost of poor data in general. Most trace back to consultancy surveys with no published methodology, and none isolate the built asset lifecycle. They are not a substitute.

So the 2004 figure will not be exactly right for a Saudi giga-project or a Qatari stadium, and it should not be quoted as though it were. Treat it as a shape rather than a value. The cost of information failing to transfer rises through the lifecycle, and the largest share falls on whoever ends up owning the thing. That shape is what transfers between markets. The number is not.

Meanwhile the instruments improved

While the measurement stalled, the drafting improved.

In FIDIC's 1999 Yellow Book, the obligation to supply as-built records, operation and maintenance manuals and training sat in Sub-Clauses 5.5 to 5.7, away from the completion machinery. The 2017 edition moved it into Sub-Clause 10.1, making the supply of those items an express requirement of taking over, and coupled it with a requirement for the Engineer to issue a Notice of No-objection on the records and the manuals. As Victoria Tyson of Howard Kennedy puts it, there cannot be a deemed taking over under Sub-Clause 10.1 without those notices.

That is a real strengthening, and it matters in a region where FIDIC based conditions are the norm. It moves asset information from a schedule item to a completion condition.

There appears to be a route around it. Tyson notes that because of how Sub-Clause 10.3 was redrafted, deemed taking over following interference with tests on completion seems to occur even without the as-built records, the manuals and the training. That is one experienced practitioner's reading rather than a settled position, and it may never be tested. It is worth knowing before relying on the clause.

The contract is not the only instrument that moved while nobody was measuring. ISO 19650-3, published in 2020, covers information management during the operational phase. Its structure is the useful part. Asset Information Requirements derive from Organizational Information Requirements, which is a formal way of saying that what you collect should follow from what your organisation actually needs to decide.

Most handover specifications are written the other way around. They list what the contractor can readily produce, then hope it proves useful. The standard asks the owner to state, in advance, what they will need to know in order to run the thing. That question is harder, which is probably why it is so often skipped.

What tends not to survive

Three categories fail to make the transfer, and none appear on a document register.

What was installed, as distinct from what was specified. As-built records describe what was drawn. Late substitutions, field modifications and the small resolutions of clashes are often absent, because the document was updated to close a contractual requirement rather than to describe reality.

Why it was done that way. Design intent is the least recorded and most valuable category. An operator who does not know why a system was configured a particular way cannot safely change it, and will eventually either leave a problem alone or create a new one while fixing it.

What was already known to be marginal. Every large project ends with a private list of things accepted rather than resolved. That list lives in people's heads and in email, and it is reliably the list operations most needs.

The year in which the owner operates and the contractor still owes

Four things that change the outcome

None require a contract variation, which matters, because by the time anyone is worried about handover the contract is signed.

Specify information as a deliverable with a named recipient and a named acceptor. A requirement stating who receives it, and who signs that it is usable, behaves differently from one that names a document.
Run the handover review before handover. A review three months out can still change what gets produced. One conducted afterwards can only describe what is missing.
Test the pack with a stranger. The only honest test is whether a competent person who was not involved could operate the asset from what has been supplied. It is cheap, and almost nobody runs it.
Ask, in writing, what was accepted rather than resolved. People generally answer a direct question.

Sources. Gallaher, O'Connor, Dettbarn and Gilday, Cost Analysis of Inadequate Interoperability in the U.S. Capital Facilities Industry, NIST GCR 04-867, National Institute of Standards and Technology, 2004, with Table 1 as reproduced in Chapman, Inadequate Interoperability: A Closer Look at the Costs, ISARC 2005. FIDIC, Conditions of Contract, 2017 edition, Sub-Clauses 10.1 and 10.3, compared with the 1999 edition. ISO 19650-3, information management during the operational phase of assets. The Public Investment Fund spending reduction was reported by Arabian Gulf Business Insight in March 2025, describing a board decision taken in December 2024 and attributed to unnamed sources rather than to a statement by the fund.

Handover is where the cost lands, and the Gulf is now taking delivery