Borehole Drilling Agreement (Ghana)

A Borehole Drilling Agreement in Ghana records the obligations the parties accept and the terms governing their arrangement.

The Water Resources Commission (WRC), established under Act 522, is the principal regulatory body for all water resources in Ghana, including groundwater. Any person or entity intending to sink a borehole for the abstraction of groundwater must obtain a Water Use Permit from the WRC before drilling commences. Section 10 of Act 522 makes it an offence to abstract water without a valid WRC permit. The Borehole Drilling Agreement should record the WRC permit number, the permitted abstraction rate in cubic metres per day, and the GPS coordinates of the approved borehole site.

The Community Water and Sanitation Agency (CWSA), established under Act 564, is responsible for enabling the provision of safe water and related sanitation services to rural communities and small towns in Ghana. CWSA district offices coordinate borehole drilling programmes, approve contractors, and monitor water quality testing in their operational areas. Communities benefiting from CWSA-supported boreholes must form a Water and Sanitation Committee (WATSAN) or Water and Sanitation Development Board (WSDB) to manage and maintain the facility, as required by CWSA guidelines.

A Borehole Drilling Agreement differs from a General Building Contract in that it deals specifically with subsurface works, rotary or percussion drilling equipment, casing installation, screen selection, gravel packing, grouting, and pump testing. The contractor is typically a member of the Ghana Water and Sanitation Professionals Association (GWASPA) or holds a licence from the relevant district assembly under the Local Governance Act 2016 (Act 936). The agreement should specify the drilling method, the target aquifer formation, the minimum borehole yield required, and the water quality parameters to be tested by an accredited laboratory.

The Ghana Standards Authority (GSA) has published standards for borehole construction including GS 881 covering the design and construction of water wells. Water quality testing must comply with the World Health Organization (WHO) Guidelines for Drinking-water Quality and the Ghana Standard for drinking water (GS 175), with results submitted to the Environmental Health and Sanitation Directorate of the relevant Metropolitan, Municipal, or District Assembly (MMDA). Payment terms under the agreement are typically structured in stages: mobilisation advance, completion of drilling to target depth, successful pump test, and final handover of water quality certificates.

The Internal Revenue Act 2000 (as replaced by the Income Tax Act 2015, Act 896) administered by the Ghana Revenue Authority (GRA) imposes withholding tax of 5% on payments made under construction and drilling contracts in Ghana. The withholding agent (the client) must deduct this amount from each payment and remit it to the GRA by the 15th of the following month. Contractors must factor this deduction into their project pricing. Disputes arising under a Borehole Drilling Agreement in Ghana are typically resolved through arbitration under the Alternative Dispute Resolution Act 2010 (Act 798) or through the High Court (Commercial Division) in Accra, depending on the value and complexity of the claim.

A Borehole Drilling Agreement in Ghana is required whenever a contractor is engaged to drill, develop, and commission a water borehole, and is particularly important in the following circumstances.

A Borehole Drilling Agreement is needed when a rural community in Ghana applies to the Community Water and Sanitation Agency (CWSA) or a district assembly for a borehole under a water and sanitation improvement programme. The agreement documents the technical specifications, cost, and timeline agreed between the community or MMDA and the drilling contractor, forming part of the project file maintained by the CWSA district office.

A Borehole Drilling Agreement is required when a private business — such as a farm, factory, hotel, or real estate developer — obtains a Water Use Permit from the Water Resources Commission (WRC) to sink a private borehole for irrigation, industrial processing, or estate water supply. The WRC permit references the agreed borehole specifications, and the drilling agreement is the primary contractual document binding the contractor to those specifications.

A Borehole Drilling Agreement is needed when an international non-governmental organisation (NGO), church, or educational institution finances a community borehole in a Ghanaian district. Donor organisations typically require a signed drilling agreement before releasing funds, and the agreement must include provisions for water quality testing by an Environmental Protection Agency (EPA) accredited laboratory.

A Borehole Drilling Agreement is required when a district assembly — acting under the Local Governance Act 2016 (Act 936) — procures borehole drilling services through competitive tendering under the Public Procurement Act 2003 (Act 663) and its amendments. In this context, the agreement supplements the standard procurement contract form with site-specific technical schedules.

A Borehole Drilling Agreement is needed when a property developer in Accra, Kumasi, Tema, or other urban area installs a supplemental groundwater supply due to unreliable Ghana Water Company Limited (GWCL) mains water. The agreement protects the developer if the contractor fails to achieve the agreed minimum yield or delivers water that does not meet the Ghana Standard GS 175 for potable water.

Parties in Ghana should prepare a Borehole Drilling Agreement (Ghana) before mobilisation of drilling equipment, not after drilling has commenced. Courts in Ghana interpret agreements based on written terms, and the High Court (Commercial Division) in Accra has consistently held that oral variations to construction contracts are difficult to enforce. Under the Water Resources Commission Act 1996 (Act 522), the Water Resources Commission (WRC) regulates groundwater abstraction in Ghana. The Community Water and Sanitation Agency Act 1998 (Act 564) governs rural water supply. The Ghana Revenue Authority (GRA) applies withholding tax to payments under construction contracts.

A valid Borehole Drilling Agreement in Ghana under the Contracts Act 1960 (Act 25) and the Water Resources Commission Act 1996 (Act 522) must contain the following essential elements.

Parties and Recitals: Full legal names and addresses of the client and the drilling contractor, the contractor's business registration number issued by the Office of the Registrar of Companies (ORC) or the Registrar of Businesses, any GWASPA membership number or district assembly licence number, and the date of the agreement. The recitals should record the WRC Water Use Permit number and reference the CWSA district office approval where applicable.

Site Description and Access: A precise description of the borehole site by GPS coordinates, plot number, and district, confirming the client has legal title or a right of access to the land under the Land Act 2020 (Act 1036). The agreement should specify arrangements for site clearance, access roads, water supply for drilling, and waste disposal in compliance with the Environmental Protection Agency Act 1994 (Act 490).

Drilling Specifications: The agreed drilling method (rotary air, rotary mud, cable tool, or percussion), the target borehole depth in metres, the borehole diameter, the type and depth of steel or uPVC casing, the screen type and slot size, the gravel pack specification, and the surface seal (grouting) requirement. The minimum acceptable borehole yield in litres per hour or cubic metres per day must be stated, with reference to the WRC permit conditions.

Development and Pump Testing: The development method (airlifting, surging, or jetting), the duration and method of the step-drawdown test, the constant-rate pump test duration (typically 24 to 72 hours), and the parameters to be recorded (water level, pumping rate, drawdown, recovery). The agreement should state what happens if the borehole fails to meet the minimum yield — whether the contractor must drill an alternative site or reimburse the client a portion of mobilisation costs.

Water Quality Testing: The contractor's obligation to collect water samples for testing by an EPA-accredited laboratory against the Ghana Standard GS 175 parameters, including total coliform, E. Coli, nitrates, fluoride, iron, manganese, arsenic, turbidity, and pH. The agreement should specify who bears the cost of re-testing if initial results are unsatisfactory.

Handpump or Motorised Pump Supply and Installation: Whether the contract includes supply and installation of a Vergnet HP100, Afridev, India Mark II, or other approved handpump or a submersible motorised pump system, the pump specification, and the manufacturer's warranty period.

Payment Schedule: Contract price in Ghana Cedis (GHS), the mobilisation advance (typically 30% of contract price), milestone payments on achievement of target depth, completion of pump test, and submission of water quality certificate, and the final payment on formal handover. The agreement should confirm whether the Ghana Revenue Authority (GRA) withholding tax of 5% applies to each payment tranche.

Completion and Handover: The date of practical completion, the documentation to be handed over (borehole log, driller's completion report, geophysical survey results, pump test report, water quality certificate), and the defects liability period (typically 12 months) during which the contractor must repair any defects at no additional charge.

Governing Law and Dispute Resolution: Ghana law, with disputes referred to arbitration under the Alternative Dispute Resolution Act 2010 (Act 798) or to the High Court (Commercial Division) in Accra. Forms-legal.com provides this Borehole Drilling Agreement (Ghana) as a professionally drafted starting point for water infrastructure contracts in Ghana. Under the Water Resources Commission Act 1996 (Act 522), the Water Resources Commission (WRC) regulates groundwater abstraction in Ghana. The Community Water and Sanitation Agency Act 1998 (Act 564) governs rural water supply. The Ghana Revenue Authority (GRA) applies withholding tax to payments under construction contracts in Ghana.