Water Industry Act 1991

Major supplies E+W

[40 F1 Bulk supplies. E+W

(1) Where, on the application of any qualifying person—

(a) it appears to the Director that it is necessary or expedient for the purposes of securing the efficient use of water resources, or the efficient supply of water, that the water undertaker specified in the application (“the supplier”) should give a supply of water in bulk to the applicant, and

(b) the Director is satisfied that the giving and taking of such a supply cannot be secured by agreement,

the Director may by order require the supplier to give and the applicant to take such a supply for such period and on such terms and conditions as may be provided in the order.

(2) In this section “qualifying person” means—

(a) a water undertaker; or

(b) a person who has made an application for an appointment or variation under section 8 above which has not been determined.

(3) Where the application is made by a person who is a qualifying person by virtue of subsection (2)(b) above, an order made under this section in response to that application shall be expressed not to come into force until the applicant becomes a water undertaker for the area specified in the order, or for an area which includes that area.

(4) Subject to subsection (3) above, an order under this section shall have effect as an agreement between the supplier and the applicant.

(5) The Director shall not make an order under this section unless he has first consulted [F2 the Environment Agency]].

(6) In exercising his functions under this section, the Director shall have regard to the desirability of—

(a) facilitating effective competition within the water supply industry;

(b) the supplier’s recovering the expenses of complying with its obligations by virtue of this section and securing a reasonable return on its capital;

(c) the supplier’s being able to meet its existing obligations, and likely future obligations, to supply water without having to incur unreasonable expenditure in carrying out works;

(d) not putting at risk the ability of the supplier to meet its existing obligations, or likely future obligations, to supply water.

Textual Amendments

F1 Ss. 40 and 40A substituted (1.7.1992) for s. 40 by Competition and Service (Utilities) Act 1992 (c. 43), s. 44; Competition and Service (Utilities) Act 1992 (Commencement No. 1) Order 1992, art. 3, Sch. Pt. I

F2 Words in s. 40(5) substituted (1.4.1996) by 1995 c. 25, s. 120(1), Sch. 22 para. 99 (with ss. 7(6), 115, 117); S.I. 1996/186, art. 3

[F3 40A Variation and termination of bulk supply agreements. E+W

(1) This section applies where, on the application of any party to a bulk supply agreement—

(a) it appears to the Director that it is necessary or expedient for the purpose of securing the efficient use of water resources, or the efficient supply of water, to vary the agreement or to terminate it, and

(b) the Director is satisfied that that cannot be achieved by agreement between the parties to the agreement.

(2) The Director may by order—

(a) vary the agreement by—

(i) varying the period for which the supply of water is to be given; or

(ii) varying any of the terms or conditions on which that supply is to be given; or

(b) terminate the agreement.

(3) Before making any order under this section the Director shall consult [F4 the Environment Agency].

(4) Where an order is made under this section the agreement concerned shall have effect subject to the provision made by the order or (as the case may be) shall cease to have effect.

(5) An order under this section may require the payment of compensation by any party to the agreement to any other party.

(6) The obligations of a water undertaker under subsection (5) above shall be enforceable under section 18 above by the Director.

(7) In exercising his functions under this section, the Director shall have regard to the expenses incurred by the supplier in complying with its obligations under the bulk supply agreement and to the desirability of—

(a) facilitating effective competition within the water supply industry;

(b) the supplier’s recovering the expenses of complying with its obligations by virtue of this section and securing a reasonable return on its capital;

(c) the supplier’s being able to meet its existing obligations, and likely future obligations, to supply water without having to incur unreasonable expenditure in carrying out works;

(d) not putting at risk the ability of the supplier to meet its existing obligations, or likely future obligations, to supply water.

(8) In this section—

• “bulk supply agreement” means an agreement between one or more water undertakers for the supply of water in bulk and includes—

  (a)

  an order under section 40 above which is deemed to be an agreement by virtue of subsection (4) of that section; and

  (b)

  any agreement which has been varied by order under this section; and

• “supplier”, in relation to a bulk supply agreement, means any water undertaker which is required by the agreement to provide a bulk supply of water.]

Textual Amendments

F3 Ss. 40 and 40A substituted (1.7.1992) for s. 40 by Competition and Service (Utilities) Act 1992 (c. 43), s. 44; Competition and Service (Utilities) Act 1992 (Commencement No. 1) Order 1992, art. 3, Sch. Pt. I

F4 Words in s. 40A(3) substituted (1.4.1996) by 1995 c. 25, s. 120(1), Sch. 22 para. 100 (with ss. 7(6), 115, 117); S.I. 1996/186, art. 3

41 Duty to comply with water main requisition. E+W

(1) It shall be the duty of a water undertaker (in accordance with section 44 below) to provide a water main to be used for providing such supplies of water to premises in a particular locality in its area as (so far as those premises are concerned) are sufficient for domestic purposes, if-

(a) the undertaker is required to provide the main by a notice served on the undertaker by one or more of the persons who under subsection (2) below are entitled to require the provision of the main for that locality;

(b) the premises in that locality to which those supplies would be provided by means of that main are—

(i) premises consisting in buildings or parts of buildings; or

(ii) premises which will so consist when proposals made by any person for the erection of buildings or parts of buildings are carried out;

and

(c) the conditions specified in section 42 below are satisfied in relation to that requirement.

(2) Each of the following persons shall be entitled to require the provision of a water main for any locality, that is to say—

(a) the owner of any premises in that locality;

(b) the occupier of any premises in that locality;

(c) any local authority within whose area the whole or any part of that locality is situated;

(d) where the whole or any part of that locality is situated in a new town, within the meaning of the M1 New Towns Act 1981—

(i) the Commission for the New Towns; and

(ii) the Development Board for Rural Wales or the development corporation for the new town, according to whether or not the new town is situated within the area for which that Board is for the time being responsible;

and

(e) where the whole or any part of that locality is situated within an area designated as an urban development area under Part XVI of the M2 Local Government, Planning and Land Act 1980, the urban development corporation.

(3) The duty of a water undertaker under this section to provide a water main shall be owed to the person who requires the provision of the main or, as the case may be, to each of the persons who joins in doing so.

(4) Where a duty is owed by virtue of subsection (3) above to any person, any breach of that duty which causes that person to sustain loss or damage shall be actionable at the suit of that person; but, in any proceedings brought against a water undertaker in pursuance of this subsection, it shall be a defence for the undertaker to show that it took all reasonable steps and exercised all due diligence to avoid the breach.

(5) In this section “local authority”, in relation to the Inner Temple and the Middle Temple, includes, respectively, the Sub-Treasurer of the Inner Temple and the Under-Treasurer of the Middle Temple.

Marginal Citations

M1 1981 c. 64.

M2 1980 c. 65.

42 Financial conditions of compliance. E+W

(1) The conditions mentioned in section 41(1)(c) above are satisfied in relation to a requirement for the provision of a water main by a water undertaker if—

(a) such undertakings as the undertaker may have reasonably required in accordance with subsection (2) below have been given by the person or persons who have required the provision of the main; and

(b) such security as the undertaker may have reasonably required has been provided for the discharge of any obligations imposed by those undertakings on any person who, under subsection (3) below, may be required to secure his undertakings.

(2) The undertakings which a water undertaker may require for the purposes of subsection (1) above in respect of any water main are undertakings which—

(a) bind the person or persons mentioned in that subsection to pay to the undertaker, in respect of each of the twelve years following the provision of the main, an amount not exceeding the relevant deficit (if any) for that year on that main; and

(b) in the case of undertakings binding two or more persons, bind them either jointly and severally or with liability to pay apportioned in such manner as they may agree.

(3) For the purposes of subsection (1)(b) above a person may be required to secure his undertakings in relation to the provision of a water main if—

(a) it was by virtue of section 41(2)(a) or (b) above that he required, or joined in requiring, the provision of the main; and

(b) he is not a public authority.

(4) Where for the purposes of subsection (1)(b) above any sums have been deposited with a water undertaker by way of security for the discharge of any obligation, the undertaker shall pay interest at such rate as may be determined either—

(a) by the undertaker with the approval of the Director; or

(b) in default of a determination under paragraph (a) above, by the Director,

on every sum of 50p so deposited for every three months during which it remains in the hands of the undertaker.

(5) An approval or determination given or made by the Director for the purposes of subsection (4) above—

(a) may be given or made in relation to the provision of a particular water main, in relation to the provision of mains of a particular description or in relation to the provision of water mains generally; and

(b) may be revoked at any time.

(6) Any dispute between a water undertaker and any other person as to—

(a) the undertakings or security required by the undertaker for the purposes of this section; or

(b) the amount required to be paid in pursuance of any such undertaking,

shall be referred to the arbitration of a single arbitrator appointed by agreement between the undertaker and that person or, in default of agreement, by the President of the Institution of Civil Engineers.

(7) In this section “relevant deficit” has the meaning given by section 43 below.

43 Calculation of “relevant deficit” for the purposes of section 42. E+W

(1) For the purposes of section 42 above the relevant deficit for any year on a water main is the amount (if any) by which the water charges payable for the use during that year of that main are exceeded by the annual borrowing costs of a loan of the amount required for the provision of that main.

(2) The annual borrowing costs of a loan of the amount required for the provision of a water main is the aggregate amount which would fall to be paid in any year by way of payments of interest and repayments of capital if an amount equal to so much of the costs reasonably incurred in providing that main as were not incurred in the provision of additional capacity had been borrowed, by the water undertaker providing the main, on terms—

(a) requiring interest to be paid and capital to be repaid in twelve equal annual instalments; and

(b) providing for the amount of the interest to be calculated at such rate, and in accordance with such other provision, as may have been determined for the purposes of this subsection.

(3) A determination for the purposes of subsection (2) above shall be made either—

(a) by the undertaker with the approval of the Director; or

(b) in default of such a determination, by the Director.

(4) For the purposes of this section the costs reasonably incurred in providing a water main (“the new main”) shall include—

(a) the costs reasonably incurred in providing such other water mains and such tanks, service reservoirs and pumping stations as it is necessary to provide in consequence of the provision of the new main; and

(b) such proportion (if any) as is reasonable of the costs reasonably incurred in providing any such additional capacity in an earlier main as falls to be used in consequence of the provision of the new main.

(5) In subsection (4) above the reference to an earlier main, in relation to the new main, is a reference to any water main which—

(a) has been provided in the period of twelve years immediately before the provision of the new main; and

(b) was so provided in pursuance of a water main requisition.

(6) Any reference in this section to the provision of additional capacity in a water main provided in pursuance of a requirement under any enactment is a reference to such works carried out or other things done in connection with the provision of that main as are carried out or done for the purpose of enabling that main to be used for purposes in addition to those for which it is necessary to provide the main in order to comply with the requirement.

(7) Any reference in this section to the water charges payable for the use during any year of any main provided by a water undertaker is a reference to so much of the aggregate of any charges payable to the water undertaker in respect of services provided in the course of that year as represents charges which—

(a) have been imposed by the undertaker in relation to premises which are connected with that main; and

(b) are reasonably attributable to the provision of a supply of water (whether or not for domestic purposes) to those premises by means of that main.

(8) An approval or determination given or made by the Director for the purposes of subsection (2) above—

(a) may be given or made in relation to the provision of a particular water main, in relation to the provision of mains of a particular description or in relation to the provision of water mains generally; and

(b) may be revoked at any time except in relation to a water main that has already been provided.

(9) In this section “water main requisition” means—

(a) a requirement under section 41 above (including, by virtue of paragraph 1 of Schedule 2 to the M3 Water Consolidation (Consequential Provisions) Act 1991, a requirement under section 40 of the M4 Water Act 1989);

(b) a requirement under the provisions of section 36 or 37 of the M5 Water Act 1945 or of section 29 of Schedule 3 to that Act (water main requisitions); or

(c) a requirement under any local statutory provision corresponding to section 41 above or to any of those provisions of that Act of 1945.

Marginal Citations

M3 1991 c. 60.

M4 1989 c. 15.

M5 1945 c. 42.

Yn ddilys o 28/05/2004

[F5 43A Calculation of “discounted aggregate deficit” for the purposes of section 42 E+W

(1) For the purposes of section 42 above the discounted aggregate deficit on a water main is the amount equal to the sum of the estimated relevant deficits for each of the twelve years following the provision of the main, in each case discounted in accordance with subsection (6) below.

(2) The estimated relevant deficit for any year is the amount (if any) by which the estimated revenue in respect of the water main for that year would be exceeded by the annual borrowing costs of a loan of the amount required for the provision of that main.

(3) Subsections (2) to (6), (8) and (9) of section 43 above (which relate to the annual borrowing costs of a loan of the amount required for the provision of a water main) shall apply for the purposes of this section as they apply for the purposes of that.

(4) Any reference in this section to the estimated revenue in respect of a water main for any year—

(a) in relation to premises expected to be connected with the main and supplied with water by a water undertaker, is a reference to so much of the aggregate of any charges expected to be payable to the undertaker for the provision of services in the course of that year as would represent charges—

(i) imposed by the undertaker in relation to those premises, and

(ii) reasonably attributable to the provision of a supply of water (whether or not for domestic purposes) to those premises by means of that main; and

(b) in relation to premises expected to be connected with the main and supplied with water by a licensed water supplier, is a reference to so much of the aggregate of any charges expected to be made during the course of that year as would be—

(i) payable by the supplier to the undertaker in respect of the duty under section 66A(2)(b), 66B(3)(b) or 66C(2)(b)(ii) below; and

(ii) reasonably attributable to the use of that main for the purpose of the supplier’s supplying water to those premises.

(5) For the purpose of calculating estimated revenue under subsection (4) above, a thing is expected to be the case if, at the time the calculation is made, it is reasonably likely to occur.

(6) The estimated relevant deficit for a year mentioned in subsection (1) above shall be discounted in order to determine its net present value by applying such factor, and in accordance with such other provision, as may be determined by the Authority.

(7) A determination made by the Authority for the purposes of subsection (6) above—

(a) may be made in relation to the provision of a particular water main or in relation to the provision of water mains generally; and

(b) may be revoked at any time except in relation to a water main in respect of which the conditions referred to in section 42(1) above have already been satisfied.]

Textual Amendments

F5 S. 43A inserted (28.5.2004) by Water Act 2003 (c. 37), ss. 91(2)(4), 105(3); S.I. 2004/641, art. 4(a) (with art. 6, Sch. 3)

44 Determination of completion date and route for requisitioned main. E+W

(1) A water undertaker shall not be in breach of a duty imposed by section 41 above in relation to any locality unless-

(a) the period of three months beginning with the relevant day has expired; and

(b) the water undertaker has not, before the end of that period, so laid the water main to be provided as to enable service pipes to premises in that locality to connect with the main at the places determined under subsection (3) below.

(2) The period mentioned in subsection (1)(a) above may be extended in any case—

(a) by agreement between the water undertaker and the person or persons who required the provision of the main; or

(b) where there is a dispute as to whether the period should be extended, by an arbitrator on a reference under subsection (4) below.

(3) The places mentioned in subsection (1)(b) above shall be—

(a) such places as are determined by agreement between the water undertaker and the person or persons who required the provision of the water main; or

(b) in default of agreement, such places as are determined by an arbitrator, on a reference under subsection (4) below, to be the places at which it is reasonable, in all the circumstances, for service pipes to premises in the locality in question to connect with the water main.

(4) A reference for the purposes of subsection (2) or (3) above shall be to a single arbitrator appointed—

(a) by agreement between the undertaker and the person or persons who required the provision of the water main; or

(b) in default of agreement, by the President of the Institution of Civil Engineers.

(5) In this section “relevant day”, in relation to a requirement to provide a water main for any locality, means the day after whichever is the later of the following, that is to say—

(a) the day on which the conditions specified in section 42 above are satisfied in relation to the requirement; and

(b) the day on which the places where service pipes to premises in that locality will connect with the main are determined under subsection (3) above.