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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This deed of agreement for installation of Irrigation Scheme made on _____________ between the (District Authority) namely District Officer (DO), (On Farm Water Management) or his authorized representative (hereinafter referred to as the First Party) and the Water Users Association (WUA) registered under WUA Ordinance 1981 revised on 2001 of Irrigation Scheme No. ___________ Village/Chak No._______________________, Union Council _____________ Tehsil __________, District ____________ (hereinafter referred to as Second Party) on the following terms and conditions

The agreed total estimated cost of Irrigation Scheme construction material (hereinafter referred to as the "total estimated cost") is Rs. ________ as reflected in Annexure-1. Out of total estimated cost, 20 percent (cost of masons/labour and that of earthen improvement) would be shared by the second party and/or beneficiaries, while the remaining 80 percent (material cost) will be born by the first party to be paid in installments (Clause 3.3) to the second party against the works completed by the second party at the rate on volumetric basis as decided by the purchase committee in its meeting held on _________ i.e. Rs. ______ per M3 (Annexure-II).


3.1 The second party shall have a joint account opened in the name of Chairman and Treasurer with the branch of any Scheduled Bank as soon as this Agreement has been signed and shall provide its Bank Account Number to the first party.

3.2 The second party shall notify the first party in writing the names, addresses and signatures of at least two office bearers (preferably Chairman and Treasurer of Water Users Association) who will jointly operate the bank account mentioned in Clause3.1. Such signatures shall not be changed without prior consent of the first party.

3.3 Payment to the second party for the construction works will be released by the first party in stages as mutually agreed by both the parties in the following manner.


lst installment = 70 percent of the material cost will be released on:

  1. deposit of 70 percent of their contribution for masons/labour in the joint account by the second party;

2nd installment = 20 percent of the material cost will be released when:

  1. at least 70 percent of the planned civil works are executed by the second party; and

  2. the second party also deposit the remaining 30 percent of their share for masons/labour in the joint account.

3rd installment = 10 percent of the material cost will be released after:

  1. completion of entire works according to the prescribed OFWM standards and specifications by the second party; and

ii. physical verification and certification of completed works by the OFWM Field Engineers/District Monitoring Committee and or consultants.

3.4 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 3.3 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 first party will arrange to release all payments to the account of second party through crossed cheque. The second party will maintain a register for all transactions and purchases made for improvement of watercourses.


The Purchase Committee comprising of representatives of first and second party will decide rate on volumetric basis in the manner given in Annexure-IV. The Committee constituted for the purpose (Annexure-111), following local shopping procedure, will survey the area and review the rates from at least three different firms/suppliers for construction material i.e. cement, bricks, sand, pipes and nakkas etc. 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 itself and will get reimbursement from the first party for the completed works as laid down 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 for the works after such inquiry as may be deemed necessary.

4.2 In case of non-utilization of funds due to some dispute regarding non-provision of skilled, semi-skilled labour on the part of second party, the second party will be liable to refund the unspent balance of their account, after making payment of the completed works at that stage, to the first party.


The works shall be completed by the second party during the fiscal year. In exceptional circumstances, the time period stated in this clause may be extended in writing by mutual consent of both the parties and approval of the Executive District Officer, Agriculture.


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 to the second party for carrying out the works.


The second party shall:

(a) take up the works and arrange for their completion within the time period stipulated in Clause 5;

(b) arrange suitable skilled and unskilled labour to carry out the works;

(c) ensure that only good quality material is procured and utilized;

(d) resolve the disputes amongst shareholders;

(e) abide by the technical guidance/directions of OFWM personnel/supervisory consultants regarding watercourse construction; and

(f) ensure that there is no mis-utilization of the money/material during construction.


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. The First party will not be responsible for any damage, if so occurred during or after completion of the work, due to mismanagement or negligence of the Water Users Association of due to natural calamities like rain, floods etc.
10. The First Party shall not be responsible for any change in the flow or discharge of the water in the watercourse, which occurs 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 animal in the flowing water.

Signature ______________________ Place ______________ Dated _____________

(On behalf of second party i.e. Water User’s Association)
Name of Chairman _____________________ Office Stamp _______________

Irrigation Scheme 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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