Contingency and Risk Allowance: How Much, Held by Whom, Released on What

Indian public-works practice sizes contingency by a flat percentage that has not moved across three successive departmental documents: CPWD provides 5 per cent up to Rs 1 crore and 3 per cent above it subject to a floor of Rs 5 lakh, carried unchanged from the Works Manual 2014 into the Standard Operating Procedures for the 2019 and 2022 manuals. The standards governing how contingency should be sized say something different: IS 15883 (Part 3):2015 calls the fixed percentage the traditional approach and points to probabilistic determination, RICS NRM 1 does not use the word at all, and HM Treasury's Green Book 2026 directs that the sum should typically not be allocated to the project. This advisory sets out how to quantify contingency against a risk register, who should hold each tier, and what a release should have to prove.

Part of AECS Research Global's publications programme — drawing on ARG's work across cost management, EPC advisory and integrated project delivery. Download the full report below.