CONTRACT AGREEMENT FOR SHALLOW WELL DRILLING

This contract is made and entered into in Jigjiga (Ethiopia) on the day of September 17, 2022 G.C. between
(here in after referred to as “The Owner " whose address is P.O. Box 00, Jigjiga, Ethiopia
on the one part and Al-Bade General Construction (here in after referred to as “The Contractor " whose address is
P.O. Box 76, Jigjiga, Ethiopia, Tel: 0901001961/0915-741580.

WHEREAS: The Owner is desirous to have 1 (ONE) shallow wells to be drilled and constructed for the purpose of
serving Fafen Woreda, Fafen Keble in Fafen Zone, Somali Regional State which are
financed by the SALMA GROUP COMPANY herein after referred to as " The Work" to be carried out as per
conditions, specification, bill of quantities incorporated in the main contract agreement for the sum of Eth Birr
1,020,000.00 (One Million Twenty Thousand Birr only). Detail priced bill of quantities are annexed with this
agreement.
AND
WHERE AS the Contractor declares himself as technically, professionally & financially qualified to execute and
complete the said works according to the bill of quantities annexed with this agreement and the terms and conditions
of this agreement.

NOW THEREFORE the Owner & the contractor in consideration of the mutual covenants, there under set forth agrees
as follows.

Article One- Work Description and Price of the Work

The Contractor will perform all works generally described as follows for the project.
1. Mobilization of all materials, equipment, and personal required to drill, installer and develop wells and others,
2. Inter site movement of manpower, equipment, rig and accessories
3. Site clearing and rigging up
4. Excavation of mud pit size (2x2x1) M3
5. Bore hole drilling with diameter of 121/2",
6. Perform Lithological Logging,
7. Supply, Install 14” steel surface casing,
8. Supply and install 8" pvc blind and screen casings,
9. Supply and install Gs ¾ observation pipe,
10. Supply and pack selected river gravel,
11. Well cleaning and developing,
12. Perform grouting to depth of 6m and backfill above the gravel pack,
13. Conduct well yield pumping test, well disinfections, chemical and bacteriological tests,
14. Prepare end of well drilling report for each well.

1.2. The cost of the works for One well drillings generally described in sub article 1.1 is Eth Birr 1,020,000.00
(One Million Twenty Thousand Birr only) (please refer to the annexed bill of quantities for detailed break
down).

1.3. The project is financed by the , and supervised and owned by them.

Article two-Obligation of the contractor

2.1. The contractor shall execute the well drilling and construction under this agreement with all care and
diligence to the best of his abilities by applying DTH/mud rotary rig to the required depth.

2.2. The Contractor shall take full responsibility for the adequacy, stability & safety of all site operations and
methods of drilling and well completion and leave the whole of the site & work clean and in a workmanship
like condition to the satisfaction of the main contractor.
2.3. The Contractor is not liable for the quality and amount of water to be abstracted from the drilled and
completed wells. However, the sub contractor is liable for amount of water resulted from poor workmanship.

2.4. The Contractor shall provide 10% performance insurance bond of the contract price for the well.

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Article Three- Obligation of the Owner

3.1. The Owner shall hand over the well sites designated for drilling, prepare access road to the well site, and
provide warranty for movement and using land for transportation.
3.2. The Owner shall assign his representative to supervise the drilling and well completion work, approve
payment certificate and deal with all maters with the sub-contractor and the “Employer" in this contract
agreement the “Employer" is referred as the “ ".

Article Four-Mode of payment

4.1. The mode of payment is as follow:

a. Advance payment of 30% of the first drilling well (one well) of the contract price, shall be paid within
7 (seven) calendar days after sub contract agreement is signed and drilling crew mobilization to the
drilling site.
b. The second payment will be effected after drilling, 30% of the contract price, which is after
completion of well drilling. If the well is abandoned, the payment will be final and paid according to
the measurement of executed work.
c. The third payment will be effected 20% of the contract price after casing installation and during
pumping test time.
d. Whereas the final payment will be the executed payment which shall be effected to the sub-contractor
upon submission of payment certificates and authorization. The payment certificate shall constitute
the deduction previous payments including any advance payment.
e. The executed payment shall be effected following the completion (partial of complete) of the work
and /or as the work approved by the “Employer’s" representative within 7 (seven) calendar days.

Article Five-Variation

5.1. The unit price and quantity provided in the estimated bill of quantity are fixed and valid for this contract only.
For any variation, which may result in an increasing by 20% the unit price will not change or remain the same.
If there exist above 20% variation, the unit price shall be determined upon negotiation between the two
parties.

Article Six- Commencement Delays and Liquidated Damages

6.1 The contractor shall start the execution of the works within 7 (seven) working days after hand over of the
site. The work shall be complete and hand over to the main contractor within 40 (forty) calendar days after
the commencement.

6.2 If the Owner suffers delays or incurs form failure on the part of the main-contractor in handing over the site
or in providing such easements like access road and land use the contractor shall be entitled to an extension
of the contract time for the completion of the works.

6.3 For each working day delay in the completion of the works due to his own fault or negligence, the sub-
contractor shall pay to the main contractor sum equal to 0.05% of the total contract sum as liquidated
damages. However, the maximum amount of the liquidated damages shall not exceed 10% of the total
contract sum.

6.4 Likewise, the Owner shall be liable to pay based on bank interest per day/month for each (if any) defaulted
payment due to his own fault or negligence.

6.5 However, the contractor will not be responsible for delays caused by force Major. In such causes, the
contractor shall be entitled to extension of time equal to time lost due to delays beyond his control. In such
causes, periodical report shall be presented to the main-contractor.

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Article 7- Acceptance of works

7.1. When the whole of the works has substantially completed & satisfactorily passing any final test to the
satisfaction of the Owner and the Employer, the Contractor may give notice to that effect for acceptance to the
main-contractor or his representative.

7.2. Within 7 (seven) days following the request by the sub-contractor, provisional acceptance shall be effected by
the owner and/or the Employer after having inspected and determined that all works have been completed in
accordance with the specifications.

7.3. Once the owner and/or the Employer’s representative that the work performed well and passed any test testify
it, the owner will write testimony for the contractor's performance.

7.4. No guarantee for defects liability in this agreement once the final acceptance i.e. between the owners and the
Employer, for the completed wells take over.

Article 8-Disputes, Arbitration and Termination

8.1. The Somali Regional State Water Resource Development Bureau or their representatives appointed by both
parties to act as arbitrator.

8.2. In case the two parties do not solve their disputes amicably through the arbitrators, either party shall summit
the case that may arise between the owner and the Contractor regarding the execution of this contract to the
appropriate tribunal.

Article 9- Miscellaneous

9.1. The following documents shall consider as contract documents i.e. this Agreement and main contract
agreement, which contains conditions, specification, drawing, and bill of quantity. Etc.

9.2. Force Major shall mean as defined in the civil code of Ethiopia

9.3. All correspondence under this contract shall made in the English languages.

9.4. The price of works provided in this contract shall be single price valid only for this contract and shall not be a
competitive price in case of similar works under other contracts.

Article 10- Effective Date

10.1. This Agreement shall have a binding effect on both parties as of the date it is signed by their duly authorized
representatives.

10.2. IN WITNESS WHERE OF the undersigned, being duly authorized, have signed agreement, on behalf of the
parties hereto, at the place on the day and year below written:

For the contractor For the Owner

Name ____________________ Name: _____________________

Signature: _________________ Signature: ___________________
Date: - ____________________ Date: -______________________

Witnesses
1._____________________________
2.______________________________

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 Bill of Quantity
Project Name: Borehole drilling
Client:
Contractor: Al Bade GC & Water Well Drilling
Target depth: 60m
Location : Faafan
S/N Description Unit Qty Rate Amount
1 General Items
Mobilization of of all plant, materials, equipment and
1.1 Ls 1 75,000.00 75,000.00
personnel requred to drill, construct & pumping test
Demobilization of of all plant, materials, equipment
1.2 Ls 1 50,000.00 50,000.00
and personnel
Sub total 1 125,000.00
2 Drilling and logging
2.1 Drillingin with 17 ½ inch from 0 to 10m M 10 7,000.00 70,000.00
2.2 Drillingin with 12 ½ inch from 10 to 60m M 50 6,000.00 300,000.00
Sub total 2 370,000.00
3 Supply , installation and construction of bore hole

3.1 steel surface casing of 14" diameter M 10 8,000.00 80,000.00

3.2 Steel productive blind casing 8" diameter M 30 7,000.00 210,000.00
3.3 steel productive screen casing 8" diameter M 20 7,500.00 150,000.00
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3.5 supply & pack selected river gravel 6:9mm diameter M 5 4,000.00 20,000.00
3.6 Well head construction Nr 1 10,000.00 10,000.00
3.7 supply & grouting with concrete (1:2:2 concrete mix) Nr 1 10,000.00 10,000.00
Sub total 3 480,000.00
4 PUMPING TEST & MISCELLANEOUS
4.1 Well development by air compressor Hrs 8 1,000.00 8,000.00
Installation & withdrawal of the required capacity
4.2 Ls 1 10,000.00 10,000.00
pump for conducting the pumping test
Pumping Step of the borehole to comfirm yiled
including provisonal test 2 hours duration step draw
4.3 Hrs 24 950.00 22,800.00
down 8 hours (4 step of of 2hrduration each ) followed
by constant discharge test 24Hrs
4.4 Monitoring Recovery 8 hours Hrs 6 700.00 4,200.00
Sub total 4 45,000.00
Total of items 1,2,3,&4 (ETH Birr) 1,020,000.00
GRAND TOTAL (ETH Birr) 1,020,000.00