Taking over
The contractual event under FIDIC at which the Engineer certifies that the works are complete, apart from any minor outstanding work and defects listed in the certificate. The governing contract determines when any defects period starts and when care of the works and the risk of loss or damage pass. It is not acceptance: under the 2017 edition only the Performance Certificate constitutes acceptance of the works.
FIDIC’s 2017 edition separates three instruments. The Taking-Over Certificate under Sub-Clause 10.1 records that the works are complete, and may list minor outstanding work and defects that will not substantially affect their safe use. The Defects Notification Period then runs for the period stated in the Contract Data. The Performance Certificate under Sub-Clause 11.9 follows it, and in the Red Book Sub-Clause 11.9 makes that certificate, and nothing earlier, the one deemed to constitute acceptance of the works. Saudi public contracts place initial receipt, «الاستلام الابتدائي», at the same point in a project; the two correspond in position, not in effect.
The 2017 edition also made the supply of as-built records and operation and maintenance manuals, where the contract calls for them, an express requirement of taking over under Sub-Clause 10.1: the works are not ready for taking over until the required Notices of No-objection on them have been given or deemed given. That converts asset information from something chased afterwards into a condition of the event itself.
What happens to the contractor’s security at taking over is set by the contract, not by the event. Three structures are in public use. Saudi procurement law holds one continuing guarantee: the final guarantee, «الضمان النهائي», which does the work of a performance security, is lodged at 5% of the contract value within 15 working days of notice of the award and, in the words of Article 61(4) of the 2019 Law, kept «إلى أن يفي المتعاقد معه بالتزاماته ويستلم المشروع استلاماً نهائياً»; the law gazetted in September 2026 carries the same rule in Article 59. Jordan’s unified construction contract exchanges the security instead: its instructions to tenderers require a defects remedy guarantee of 5% of the final value of the completed works when the Taking-Over Certificate is received, and return the performance security when it is lodged, while its particular conditions also allow the performance security to be reduced to 5% in place of the exchange. The third structure is retention: the same Jordanian contract certifies half the retention at taking over and the balance after the last Defects Notification Period. FIDIC itself fixes no amount; in the Jordanian contract, which follows FIDIC’s numbering, the Performance Security percentage is written into the appendix to tender against Sub-Clause 4.2.
The same term, through four lenses
01
Project
the delivery team and the contract
Taking over is the event the project is built to reach. It is a certificate issued by the Engineer, and the governing contract attaches commercial effects to it: delay damages may stop accruing, a defects period may start, care of the works and the risk of loss or damage may pass to the employer, and the securities and retention may change. The contract determines which of these follow from taking over and which from another event. Under the Jordanian unified contract half the retention is certified and the performance security is exchanged for a defects remedy guarantee, or reduced where the particular conditions provide; under Saudi procurement law the final guarantee stays in place until final receipt.
For the delivery organisation it is the finish line, which is exactly the problem the rest of this entry describes. Everything the project is measured on completes at this date, and everything the owner will live with begins at it.
Fixed by
FIDIC Conditions of Contract, 2017 edition, Sub-Clause 10.1, taking over the works and sections; the contract’s own security clause and its Contract Data or appendix to tender for the amount and the release of the Performance Security and the retention.
Recorded in
The Taking-Over Certificate, with its list of outstanding work and defects.
02
Engineering
design, commissioning and the technical record
Engineering reads the same event as a documentary condition. The 2017 edition made the supply of as-built records, operation and maintenance manuals and training, where the contract calls for them, an express requirement of taking over under Sub-Clause 10.1: the works are not ready for taking over until the required Notices of No-objection on the records and the manuals have been given or deemed given and the required training has been completed.
What the clause tests is supply and non-objection, not usability. A complete set of manuals for equipment that was substituted late satisfies the clause and fails the operator, and the difference is not visible in the certificate.
Fixed by
FIDIC Conditions of Contract, 2017 edition, Sub-Clause 10.1, with the Notice of No-objection on the as-built records and the O&M manuals. FIDIC, press release, Rainbow Suite, second edition of the Red, Yellow and Silver Books, March 2018, page 6, on Sub-Clause 10.1 across the three books. ISO 19650-3 for information management in the operational phase.
Recorded in
The as-built records, the O&M manuals and the Notice of No-objection.
03
Finance
the accounts and the fixed asset register
Finance is looking for a different event on the same day, and may use this one because it is documented by a certificate. Under IPSAS 45 depreciation begins when the asset is available for use, meaning in the location and condition necessary for it to be capable of operating in the manner management intended.
That is a test about capability, not about a contractual milestone. The Taking-Over Certificate may be relevant evidence for that test and may become the only evidence presented. An accounting judgement about capability can then rest on a document written for a contractual purpose.
Fixed by
IPSAS 45, application guidance AG27: depreciation of an asset begins when it is available for use, in the location and condition necessary for it to be capable of operating in the manner intended by management.
Read the sources
- IPSAS 45, property, plant and equipment
2023, effective 1 January 2025; read 2026-09-01. Free in full, with its Basis for Conclusions in the same document. Replaced IPSAS 17 from 1 January 2025.
Recorded in
The capitalisation date on the fixed asset register, and the transfer out of capital work in progress.
04
Operations
the people who run and maintain it
For operations, the date matters because of the contractual responsibilities that may change on it. The governing contract determines whether care of the works and the risk of loss or damage pass to the employer at taking over, at another event or section by section. Each party’s insurance of the works has to cover the period in which that party bears the risk, with no gap between the contractor’s cover and the owner’s. Where the contract permits it, the owner may put the asset into use from taking over, but permission to use the asset is not evidence that the operating organisation is ready to run it.
Operational readiness does not pass with the certificate. Staffing, the authority to operate, maintenance arrangements, data, spares, emergency procedures and a budget have to be established and evidenced through a separate operational transition, and no construction certificate shows that this has happened. Where the governing contract counts the defects period from taking over, it runs from the date in the certificate, not from the day the operating organisation is ready; under FIDIC 2017 acceptance of the works comes only with the Performance Certificate.
Fixed by
The governing contract and its particular conditions, whose clauses on care of the works, risk of loss or damage, insurance and the defects period specify when each obligation or effect begins. Under FIDIC 2017, Sub-Clause 11.9 for acceptance by the Performance Certificate.
Recorded in
The insurance schedule, the defects notification log, and the operational handover record where one is kept.
Where the lenses part
Project against Operations
The same certificate closes the project phase and can begin the owner’s exposure. Where the governing contract ties them to taking over, delay damages stop, a defects period begins, and care of the works and the risk of loss or damage pass to the employer, while the contractor’s obligations to finish outstanding work and remedy defects continue. Where the contract provides for it, retention is part released and the security reduced or exchanged on the same day, while the owner may begin to bear that risk and to operate an asset it has not yet learned to run. This conflict does not require bad conduct; the incentives weaken as the owner’s need begins.
Project against Finance
Taking over is a contractual event; capitalisation requires a capability test. They fall on the same day only when the asset really is capable of operating as management intended on the certificate date, which is a question about the receiving organisation as much as about the plant. Substituting one for the other is not obviously wrong on any individual project, which is why it is rarely challenged, and it fixes the start of a depreciation charge that runs for decades.
What has to agree, and how you would know
| The datum | Held by | The test |
|---|---|---|
| The date itself | Project, Finance, Operations | Put three dates side by side: the Taking-Over Certificate, the capitalisation date on the register, and the date the operating organisation actually took the asset on. If all three are identical, ask what evidence was used for the second, since two of them are set by different tests. |
| The information supplied at taking over | Engineering, Operations | Take the list of documents accepted under Sub-Clause 10.1 and ask an operator to find, in them, the maintenance requirement for one named piece of plant. Supply was certified; usability was not, and this is the cheapest test of the difference. |
| Insurance and care of the works | Project, Operations | Find the event on which the governing contract passes care of the works and the risk of loss or damage, and check the owner’s policy start date against the date of that event, not against the certificate by default. A policy that starts later leaves a gap in cover between the two dates, which comes to light only if something is damaged within it. |
| The security after taking over | Project, Operations | List every security and every retention the contract holds, with the event that reduces, exchanges or releases each one. Then check that whichever instrument is left after taking over is still valid on the last day of the Defects Notification Period, or of the applicable Saudi warranty period, and is extended before it lapses rather than after. |
Sources
FIDIC Conditions of Contract, 2017 edition, Sub-Clauses 10.1 and 11.9 (the Red Book text for 11.9), as quoted in Cotovelea, Tsaturova and Glover, Differences between the Civil and Common Law, Part 2, a presentation published by FIDIC, slides 2 and 9, and in the International Bar Association’s Construction Law International, October 2023. Saudi Government Tenders and Procurement Law 2019, Article 61(1) and (4), in the consolidated Arabic text of the Law and its Executive Regulations published by the Ministry of Finance; Government Tenders and Procurement Law gazetted in Umm Al-Qura on 4 September 2026, Article 59. Jordan Ministry of Public Works and Housing, Unified Construction Contract 2010, second amended edition 2013: Instructions to Tenderers 5-2, Particular Conditions 4.2, General Conditions 14.9 and the appendix to tender.
Read the sources
- Cotovelea, Tsaturova and Glover, Differences between the Civil and Common Law, Part 2: Delay Damages and Taking-Over
slides 2 and 9, conference presentation; read 2026-09-25. Free, a conference presentation published by FIDIC. Slide 2 quotes Sub-Clause 10.1 on taking over, and slide 9 quotes Red Book Sub-Clause 11.9: only the Performance Certificate is deemed to constitute acceptance of the Works. - International Bar Association, FIDIC, Construction Law International, October 2023
Construction Law International, 17 October 2023; read 2026-09-25. Free. Country reports on the FIDIC forms. The Vietnam report, by CNC Vietnam Law Firm, distinguishes taking over from acceptance: under the FIDIC Conditions the works are accepted only when the Performance Certificate is issued under Sub-Clause 11.9, after the Defects Notification Period, whereas Vietnamese law treats taking over as acceptance. - Saudi Government Tenders and Procurement Law and its Executive Regulations, consolidated Arabic text, third edition
third edition, the law in force until the new law takes effect; amendments to the regulations after this edition are not consolidated in it; read 2026-09-25. Free in full, in Arabic, from the Ministry of Finance: each article of the 2019 Law printed beside the regulations that implement it, 117 pages. The enacted text on securities and receipt. Law Article 61(1) sets the final guarantee at 5% of the contract value within 15 working days of notice of the award, and 61(4) keeps it until the contractor has performed its obligations and the project is finally received. Regulations Article 101 requires the final guarantee to be extended in construction contracts where maintenance and warranty work runs «لما بعد انتهاء سنة الضمان المشار إليه في الفقرة (1) من المادة (الثامنة والعشرين بعد المائة)»; Article 111 pays a final statement of not less than 10% in public construction contracts after initial receipt; Article 128 sets a warranty period of not less than one year from initial receipt, keeps the warranty for shortcomings not dealt with at initial receipt, and makes final receipt follow the end of that period and the delivery of drawings, equipment specifications and project documents. - Jordan Ministry of Public Works and Housing, Unified Construction Contract for Construction Projects 2010, second amended edition 2013, Arabic
2010, second amended edition 2013, as issued with the tender; read 2026-09-25. Free, in Arabic, as issued with a tender of the Ministry of Digital Economy and Entrepreneurship, 128 pages: instructions to tenderers, general conditions on FIDIC’s numbering, particular conditions, appendix to tender and forms. Instructions to tenderers 5-2 require a defects remedy guarantee of 5% of the final value of the completed works when the Taking-Over Certificate is received, and return the performance security when it is lodged. Particular Conditions 4.2 allow the performance security instead to be reduced to 5% after taking over. General Conditions 14.9 certify half the retention at taking over and the balance after the last Defects Notification Period. The percentages in the appendix to tender are that tender’s.