Pakistan Punjab Irrigated-Agriculture Productivity Improvement Project (pipip) Environmental and Social Assessment Directorate General Agriculture (Water Management), Agriculture Department Government of Punjab, Lahore November 2011

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Participation Agreement



This deed of agreement for the Improvement of watercourse is made on _____________between the District Officer (On Farm Water Management) or his authorized person of District Government (hereinafter referred to as the First Party) and the Water Users Association (WUA) registered under WUA Ordinance 1981 (amended 2001) of Watercourse No. ___________ Village/Chak No._______________________, Union Council _____________ Tehsil __________, District ____________ (hereinafter referred to as Second Party).

WHEREAS the parties agree to the following terms and conditions.


1.1 Total cost of the watercourse improvement is determined as Rs. _______(Annexure-1). Cost of construction material of the watercourse is termed as Material Cost and is Rs.-________ (about 64% of the total estimated cost). Cost of skilled and unskilled labour as well as earthen improvement is termed as Labour Cost (about 36% of the total estimated cost).Material cost will be provided by the First Party as subsidy to the Second Party, whereas, labour Cost shall be contribution of the Second Party for watercourse improvement.

1.2 Material Cost will be paid by the First Party to the Second Party in three installments as stipulated below in clause 3.1.


2.1 After Signing of mutual agreement, the second party will open a contract specific joint bank account in any commercial bank which will be jointly operated by Chairman and Treasurer of the Water User Association (WUA) and report of the account will be made to First Party.

2.2 Second Party will provide copy of specimen signatures of account operators (Chairman and Treasurer WUA) to the First Party. Any changes shall be communicated to the First Party immediately. The signatories shall not be changed without prior consent of the First Party.


3.1 Payment to the Second Party for the construction works shall be released by the first

Party in three installments in the following manner.

First Installment

Release of 40 percent of the estimated material cost on receipt of First Interim Completion Report (ICR-I) meeting/fulfilling the following requirements and dully verified by the consultants.

  • Issuance of technical sanction by the competent authority.

  • Deposit of 50 percent farmer’s share on account of labour charges for lining and installation of allied structures.

  • Renovation of at least 50 percent of designed earthen sections.

Second Installment

Release of 30 percent of the estimated material cost on receipt of Second Interim Completion Report (ICR-II) meeting/fulfilling the following requirements and dully verified by the consultants.

  • Deposit of remaining 50 percent farmer’s share on account of labour charges for lining and installation of allied structures.

  • Renovation of entire designed earthen sections.

  • Completion of at least 40 percent planned lining and allied works.

Third Installment

Release of 30 percent of the estimated material cost on receipt of Final Completion Report (FCR) meeting/fulfilling the following requirements and dully verified by the consultants.

  • Completion of all planned works.

  • Renovation of entire designed earthen sections.

  • Rectification of any pending discrepancy.

3.2 Payment at each stage will be made by the first party on submission of a bill for completed portion of works at the stages agreed under clause 3.1 to the second party on its certification by the Deputy District Officer. Thereafter, site verification will also be carried out by the DO/AAE and a contingent bill will be prepared and submitted by the DO (OFWM) to the District Accounts Officer, for making payment to the second party. The Second Party will release all payments through crossed cheques. The second party will maintain record of all transactions and purchases made for improvement of watercourse in a specified register.


The Purchase Committee comprising of representatives of first and second party will decide itemzed rate of construction materials. The Committee constituted for the purpose (Annexure-11), shall procure the construction material following local shopping procedure. The committee shall survey the local market/area and collect the rates of construction materials i.e. cement, bricks, sand, pipes and nakkas etc. from at three different firms/suppliers. The quotations so offered will be in the name of Purchase Committee and other relevant record thereof will be maintained in a proper manner by the second party to enable its verification by the representatives of first party. The second party shall procure material from the local market at the lowest competitive rates finalized by the committee constituted for the purpose, execute the works and get reimbursement from the first party for the completed works in accordance in clause 3 above. There will be no financial implication on the part of first party, if the actual expenditure exceeds the initially agreed estimated cost.

4.1. In the event of any misuse of funds by the second party, the first party shall have the right to freeze the bank account of the second party and initiate inquiry as deemed necessary.

4.2. In case of non-utilization of funds due to any reason, the second party will be liable to refund the unspent balance to the first party.


The works shall be completed by the second party with in 120 days. The second party shall be responsible for timely completion. In exceptional circumstances, the time period may be extended in writing by mutual consent of both the parties and approval of the Executive District Officer, Agriculture.


The First Party shall:

  • Issue directions to the Second Party (WUA) for the improvement and construction of watercourse.

  • Conduct the survey and prepare the design of watercourse according to the engineering principles.

  • Prepare the cost estimates of watercourse.

  • Provide help in improvement / construction of watercourse and arrangement of Govt. funds in shape of installments to the WUA.

  • Provide guidance in construction works according to the standards and specifications of the department to complete the task in time.

  • Resolve the disputes amongst the WUA.

  • The first party shall be responsible for providing regular and frequent supervision and guidance according to the standards and specifications of the On Farm Water Management (OFWM) to the second party for carrying out the works.


The Second Party shall

  • Perform duty under the Water Users Ordinance 1981 (revised 2001).

  • Provide the approved Chak Plan and Warabandi from the Irrigation Department.

  • Provide the list of shareholders of the watercourse attested by the Numberdar or WUA chairman.

  • Resolve the disputes of members amicably.

  • Clear the right of way of watercourse by the shareholders.

  • Collect the farmer’s share from the shareholders well in time.

  • Complete the improvement & lining works within the specific period agreed with the First party.

  • Arrange requisite machinery, materials and suitable skilled and unskilled labour to carry out the works.

  • Purchase the construction materials from the local market on competitive within limits approved by the District Rates Assessment committee (DARC).

  • Chairman Water Users Association will act as Chairman Purchase committee.

  • Utilize the allocated/sanctioned funds (Govt. + Farmer Share) properly, and Use/consume the construction materials according to the departmental standards and specifications. The WUA will be maintained the record of all receipts and consumptions in the specified register.

  • Follow the guidelines and instructions of the Consultants and OFWM field staff.

  • Provide the access to the First Party or its representatives during the improvement of watercourse regarding its routes /command area.

  • Provide the purchase record / vouched accounts to the First Party or its representative on its demand.

  • Make the alternative route/passage arrangement during watercourse improvement process.


During the execution of the scheme, if any dispute arises, relating to any aspect of this Agreement, the parties shall first attempt to settle the issue through mutual and amicable consultation. If the same is not resolved through such consultation, the matter will be referred for arbitration to the Executive District Officer, Agriculture, whose decision will be final and binding for the parties to such dispute, and will not be liable to be challenged in any court of law.


9.1 The First Party will not be responsible for any damage, if so occurred during or after completion of work, due to mismanagement or negligence of the Water User Association or due to natural calamites like rain, floods etc.

9.2 The First Party shall not be responsible for any change in the flow or discharge of the water in the watercourse, which occur due to change in full supply level of the canal, minor etc. The First Party shall also not be responsible for over-topping etc. due to increase in discharge over and above discharge of the watercourse or any sort of hindrance/ obstacle created by human or animals in the flow of water.

Signature ______________________ Place ______________ Dated _____________

(On behalf of second party i.e. Water User’s Association)

Name of Chairman _____________________ Office Stamp _______________

Watercourse No. __________________ Village /Chak No. _____________
Signature _____________________ Place ______________ Dated _____________

(On behalf of first party i.e. Project Authority)

DDO, Tehsil _________________ Office Stamp _______________


  1. Signature ___________ ____Place _________________ Dated __________

Name ______________________ Village ______________ Tehsil _________

  1. Signature _______________ Place ________________ Dated __________

Name _____________________ Village ______________ Tehsil _________

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