Water Industry Act 1991

Major supplies E+W

[F1 40 Bulk supplies. E+W

(1) This section applies where—

(a) a qualifying person requests a water undertaker to provide a supply of water in bulk to the qualifying person, or

(b) a water undertaker proposes such an arrangement;

and references in this section to the supplier are references to the water undertaker who is to provide the supply of water.

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

(a) a water undertaker;

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

(3) On the application of the qualifying person or the supplier, the Authority may—

(a) if it appears to the Authority 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 supplier should give a supply of water in bulk to the qualifying person, and

(b) if the Authority is satisfied that the supplier and qualifying person cannot reach agreement within a reasonable time,

by order require the supplier to give and the qualifying person to take a supply of water in bulk for such period and on such terms and conditions as may be specified in the order.

(4) Before making an order under subsection (3), the Authority must consult the appropriate agency, in particular about whether the proposed supply of water would secure an efficient use of water resources, taking into account the effect on the environment of the proposed supply.

(5) Subject to subsection (6), an order under subsection (3) has effect as an agreement between the supplier and the qualifying person.

(6) If the Authority makes an order under subsection (3) that affects a person who is a qualifying person by virtue of subsection (2)(b), the Authority must frame the order so that it does not have effect until—

(a) the person becomes a water undertaker for the area specified in the order, or

(b) the person becomes a water undertaker for an area that includes the area specified in the order (in the case of a water undertaker applying for a variation).

(7) Neither the CMA nor the Authority may exercise, in respect of an agreement for the supply of water in bulk by a water undertaker to a qualifying person, the powers conferred by—

(a) section 32 of the Competition Act 1998 (directions in relation to agreements);

(b) section 35(2) of that Act (interim directions).

(8) Subsection (7)(b) does not apply to the exercise of powers in respect of conduct—

(a) which is connected with an agreement for the supply of water in bulk by a water undertaker to a qualifying person, and

(b) in respect of which section 35(1) of the Competition Act 1998 applies because of an investigation under section 25 of that Act relating to a suspected infringement of the Chapter 2 prohibition imposed by section 18(1) of that Act.

(9) In exercising its functions under this section, the Authority must 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.

(10) In this section and section 40A “the appropriate agency”, in relation to a determination whether to make an order under subsection (3) or section 40A(1) which would result in, or which would vary or terminate, a bulk supply agreement, means—

(a) the Environment Agency, in a case where all parties to the bulk supply agreement are or would be—

(i) a water undertaker whose area is wholly in England, or

(ii) a person who would, if the person's application for an appointment or variation is determined in accordance with the application, be such a water undertaker;

(b) the NRBW, in a case where all parties to the bulk supply agreement are or would be—

(i) a water undertaker whose area is wholly in Wales, or

(ii) a person who would, if the person's application for an appointment or variation is determined in accordance with the application, be such a water undertaker;

(c) both the Environment Agency and the NRBW, in any other case.

(11) In this section and sections 40A to 40J “bulk supply agreement” means an agreement with one or more water undertakers for the supply of water in bulk and includes—

(a) an order under subsection (3) which is deemed to be an agreement by virtue of subsection (5), and

(b) any agreement which has been varied by order under section 40A(1).]

Textual Amendments

F1 Ss. 40-40J substituted for ss. 40, 40A (6.4.2015 for the insertion of s. 40J) by Water Act 2014 (c. 21), ss. 8(1), 94(3) (with s. 8(2)); S.I. 2015/773, art. 2(1)(a)(i) (with art. 4)

[F1 40A Variation and termination of bulk supply agreements. E+W

(1) On the application of any party to a bulk supply agreement, the Authority may—

(a) if it appears to the Authority that it is necessary or expedient for the purpose of securing the efficient use of water resources, or the efficient supply of water, that the bulk supply agreement should be varied or terminated, and

(b) if the Authority is satisfied that variation or termination cannot be achieved by agreement within a reasonable time,

by order vary or terminate the bulk supply agreement.

(2) Before making an order under subsection (1), the Authority must consult the appropriate agency, in particular about whether the proposed variation or termination of the bulk supply agreement would secure an efficient use of water resources, taking into account the effect on the environment of what is proposed.

(3) If an order under subsection (1) is made in relation to a bulk supply agreement, the agreement—

(a) has effect subject to the provision made by the order, or

(b) ceases to have effect (as the case may be).

(4) An order under subsection (1) may require any party to the agreement to pay compensation to any other party.

(5) Neither the CMA nor the Authority may exercise, in respect of an agreement to vary or terminate a bulk supply agreement, the powers conferred by—

(a) section 32 of the Competition Act 1998 (directions in relation to agreements);

(b) section 35(2) of that Act (interim directions).

(6) Subsection (5)(b) does not apply to the exercise of powers in respect of conduct—

(a) which is connected with an agreement to vary or terminate a bulk supply agreement, and

(b) in respect of which section 35(1) of the Competition Act 1998 applies because of an investigation under section 25 of that Act relating to a suspected infringement of the Chapter 2 prohibition imposed by section 18(1) of that Act.

(7) In exercising its functions under this section, the Authority must have regard to the expenses incurred by the supplier in complying with its obligations under the bulk supply agreement in question 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 and sections 40B to 40J—

• “qualifying person” has the meaning given by section 40;

• “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

F1 Ss. 40-40J substituted for ss. 40, 40A (6.4.2015 for the insertion of s. 40J) by Water Act 2014 (c. 21), ss. 8(1), 94(3) (with s. 8(2)); S.I. 2015/773, art. 2(1)(a)(i) (with art. 4)

[F1 40B Codes in respect of bulk supply agreements E+W

(1) The Authority may issue one or more codes in respect of bulk supply agreements.

(2) A code may make provision about—

(a) procedures in connection with making a bulk supply agreement;

(b) procedures in connection with varying or terminating a bulk supply agreement;

(c) procedures to be followed by the Authority in determining whether to make an order under section 40(3) or 40A(1);

(d) the terms and conditions of a bulk supply agreement, including terms as to the duration of such an agreement;

(e) principles for determining the terms and conditions that should or should not be incorporated into a bulk supply agreement;

(f) the steps to be taken by the Authority in determining whether a person is complying with a code.

(3) A code must include provision requiring persons proposing to make, vary or terminate a bulk supply agreement to consult the appropriate agency.

(4) If the Authority considers that a water undertaker is not acting as required by a code, the Authority may give the undertaker a direction to do, or not to do, a particular thing specified in the direction.

(5) The Authority may not give a direction under subsection (4) requiring a person to enter into, vary or terminate an agreement.

(6) It is the duty of a water undertaker to comply with a direction under subsection (4), and this duty is enforceable by the Authority under section 18.

(7) A code may make different provision for different persons or different descriptions of person.

(8) The Authority may from time to time revise a code issued under this section and issue a revised code.

(9) A revised code may include provision for applying any of its revisions to bulk supply agreements made before the revised code comes into force.

(10) In this section “the appropriate agency”, in relation to a bulk supply agreement or proposed bulk supply agreement, means the body that would be consulted by the Authority under section 40(4) or 40A(2) if an order under section 40(3) or 40A(1) were being considered in relation to the agreement or proposed agreement.

Textual Amendments

F1 Ss. 40-40J substituted for ss. 40, 40A (6.4.2015 for the insertion of s. 40J) by Water Act 2014 (c. 21), ss. 8(1), 94(3) (with s. 8(2)); S.I. 2015/773, art. 2(1)(a)(i) (with art. 4)

40C Codes under section 40B: procedure E+W

(1) Before issuing a code under section 40B, the Authority must—

(a) prepare a draft of the proposed code under section 40B;

(b) consult the appropriate agency;

(c) consult such other persons about the proposed code as it considers appropriate.

(2) The Authority must specify the period (“the consultation period”) within which persons may make representations about the proposed code.

(3) Before a code under section 40B prepared by the Authority is issued, the Minister may direct the Authority—

(a) not to issue the code, or

(b) to issue the code with specified modifications.

(4) Subsection (3) is subject to subsections (6) and (7).

(5) In subsection (3) “the Minister” means—

(a) the Secretary of State, so far as a code prepared by the Authority relates to bulk supply agreements to which all parties are—

(i) a water undertaker whose area is wholly or mainly in England, or

(ii) a person who would, if the person's application for an appointment or variation is determined in accordance with the application, be such a water undertaker;

(b) the Welsh Ministers, so far as a code prepared by the Authority relates to bulk supply agreements to which all parties are—

(i) a water undertaker whose area is wholly or mainly in Wales, or

(ii) a person who would, if the person's application for an appointment or variation is determined in accordance with the application, be such a water undertaker;

(c) the Secretary of State and the Welsh Ministers acting jointly, so far as a code prepared by the Authority relates to bulk supply agreements to which—

(i) a person falling within paragraph (a)(i) or (ii) is party, and

(ii) a person falling within paragraph (b)(i) or (ii) is party.

(6) If the power under subsection (3) is exercised to give a direction in respect of such bulk supply agreements as are referred to in paragraph (a), (b) or (c) of subsection (5), it may not be exercised again in respect of such bulk supply agreements as are referred to in that paragraph.

(7) If the power under subsection (3) to give a direction in respect of such bulk supply agreements as are referred to in paragraph (a), (b) or (c) of subsection (5) is not exercised on the first occasion on which it may be so exercised, it may not be exercised in respect of such bulk supply agreements as are referred to in that paragraph on a later occasion.

(8) A direction under subsection (3) must be given within the period of 28 days beginning with the day after the end of the consultation period, and a code prepared by the Authority in relation to which a direction may be given may not be issued before that period of 28 days has expired.

(9) In this section “the appropriate agency” means—

(a) the Environment Agency, so far as a proposed code relates to bulk supply agreements to which all parties are persons mentioned in section 40(10)(a)(i) or (ii);

(b) the NRBW, so far as a proposed code relates to bulk supply agreements to which all parties are persons mentioned in section 40(10)(b)(i) or (ii);

(c) both the Environment Agency and the NRBW, in any other case.

(10) This section is subject to section 40D.

Textual Amendments

F1 Ss. 40-40J substituted for ss. 40, 40A (6.4.2015 for the insertion of s. 40J) by Water Act 2014 (c. 21), ss. 8(1), 94(3) (with s. 8(2)); S.I. 2015/773, art. 2(1)(a)(i) (with art. 4)

40D Codes under section 40B: minor or urgent revisions E+W

(1) This section applies if the Authority proposes to issue a revised code under section 40B and, in the view of the Authority, the revision or each of the revisions proposed to be made is—

(a) a revision for which consultation is unnecessary, or

(b) a revision that it is necessary or desirable to make without delay.

(2) Section 40C does not apply to the proposed revised code.

(3) Once the Authority has issued the revised code, it must give notice as soon as reasonably practicable of—

(a) the issuing of the revised code, and

(b) as regards each revision contained in it, whether in the view of the Authority the revision falls within paragraph (a) or (b) of subsection (1).

(4) Notice under subsection (3) is to be given to such persons as the Authority considers appropriate.

(5) Unless the Authority gives notice that a revision in a revised code is in the view of the Authority a revision falling within subsection (1)(a), the revision ceases to have effect at the end of the period of six months beginning with the day after that on which the revised code is issued.

Textual Amendments

F1 Ss. 40-40J substituted for ss. 40, 40A (6.4.2015 for the insertion of s. 40J) by Water Act 2014 (c. 21), ss. 8(1), 94(3) (with s. 8(2)); S.I. 2015/773, art. 2(1)(a)(i) (with art. 4)

40E Rules about charges for the supply of water in bulk E+W

(1) The Authority may issue rules about charges that may be imposed by a water undertaker under a bulk supply agreement.

(2) The rules may in particular make provision about—

(a) what types of charge may be imposed;

(b) the amount or the maximum amount, or a method for determining the amount or maximum amount, of any type of charge;

(c) principles for determining what types of charge may or may not be imposed;

(d) principles for determining the amount of any charge that may be imposed;

(e) publication of the charges that may be imposed.

(3) If the Authority considers that a water undertaker is not acting as required by rules under this section, the Authority may give the undertaker a direction to do, or not to do, a particular thing specified in the direction.

(4) It is the duty of a water undertaker to comply with a direction under subsection (3), and this duty is enforceable by the Authority under section 18.

(5) The rules may—

(a) make different provision for different water undertakers or different descriptions of water undertaker;

(b) make different provision for different purposes;

(c) make provision subject to exceptions.

(6) The Authority may from time to time revise rules issued under this section and issue revised rules.

(7) The Authority must issue revised rules if—

(a) guidance is issued under section 40I, and

(b) the Authority, having regard to that guidance, considers that it is appropriate to revise the rules.

(8) Revised rules may include provision for applying any of their revisions to bulk supply agreements made before the revised rules come into effect.

Textual Amendments

F1 Ss. 40-40J substituted for ss. 40, 40A (6.4.2015 for the insertion of s. 40J) by Water Act 2014 (c. 21), ss. 8(1), 94(3) (with s. 8(2)); S.I. 2015/773, art. 2(1)(a)(i) (with art. 4)

40F Rules under section 40E: provision about the reduction of charges E+W

(1) Rules under section 40E may provide for the reduction of charges payable for a supply of water under a bulk supply agreement where conditions specified by the rules are satisfied.

(2) Rules made by virtue of subsection (1) may in particular—

(a) specify conditions that affect any party to a bulk supply agreement;

(b) require that steps be taken for the purpose of reducing or managing water consumption;

(c) specify conditions about reducing charges payable by a person who—

(i) is not party to the agreement, and

(ii) takes or proposes to take such steps as satisfy or would satisfy a condition falling within paragraph (b).

(3) The rules may provide that, where a charge falls to be reduced in accordance with rules made by virtue of subsection (1), the water undertaker to which the charges are payable must give notice of that reduction to the Authority.

(4) Rules made by virtue of subsection (3) may—

(a) make provision as to the content of the notice;

(b) specify the period within which an undertaker is to give notice to the Authority.

(5) Provision under subsection (4)(a) may in particular require the notice to specify—

(a) the provision of the rules that brings about the reduction in the charge;

(b) the amount of the charge, with and without the reduction;

(c) the period for which the reduction has effect.

Textual Amendments

F1 Ss. 40-40J substituted for ss. 40, 40A (6.4.2015 for the insertion of s. 40J) by Water Act 2014 (c. 21), ss. 8(1), 94(3) (with s. 8(2)); S.I. 2015/773, art. 2(1)(a)(i) (with art. 4)

40G Rules under section 40E: procedure E+W

(1) Before issuing rules under section 40E, the Authority must—

(a) prepare a draft of the proposed rules, and

(b) consult such persons about the proposed rules as it thinks appropriate.

(2) The Authority must specify the period (“the consultation period”) within which persons may make representations about the proposed rules.

(3) The Authority must have regard to guidance issued under section 40I in making rules under section 40E.

(4) Before rules under section 40E prepared by the Authority are issued, the Minister may direct the Authority not to issue the rules.

(5) In subsection (4) “the Minister” means—

(a) the Secretary of State, so far as rules prepared by the Authority relate to bulk supply agreements to which all parties are—

(i) a water undertaker whose area is wholly or mainly in England, or

(ii) a person who would, if the person's application for an appointment or variation is determined in accordance with the application, be such a water undertaker;

(b) the Welsh Ministers, so far as rules prepared by the Authority relate to bulk supply agreements to which all parties are—

(i) a water undertaker whose area is wholly or mainly in Wales, or

(ii) a person who would, if the person's application for an appointment or variation is determined in accordance with the application, be such a water undertaker;

(c) the Secretary of State and the Welsh Ministers acting jointly, so far as rules prepared by the Authority relate to bulk supply agreements to which—

(i) a person falling within paragraph (a)(i) or (ii) is party, and

(ii) a person falling within paragraph (b)(i) or (ii) is party.

(6) A direction under subsection (4) must be given within the period of 28 days beginning with the day after the end of the consultation period, and rules may not be issued before that period of 28 days has expired.

(7) This section is subject to section 40H.

Textual Amendments

F1 Ss. 40-40J substituted for ss. 40, 40A (6.4.2015 for the insertion of s. 40J) by Water Act 2014 (c. 21), ss. 8(1), 94(3) (with s. 8(2)); S.I. 2015/773, art. 2(1)(a)(i) (with art. 4)

40H Rules under section 40E: minor or urgent revisions E+W

(1) This section applies if the Authority proposes to issue revised rules under section 40E and, in the view of the Authority, the revision or each of the revisions proposed to be made is—

(a) a revision for which consultation is unnecessary, or

(b) a revision that it is necessary or desirable to make without delay.

(2) Section 40G does not apply to the proposed revised rules.

(3) Before issuing the revised rules, the Authority must give notice to the Minister of its intention to issue revised rules.

(4) Before the revised rules are issued, the Minister may direct the Authority not to issue the revised rules.

(5) A direction under subsection (4) must be given within the period of 14 days beginning with the day after the day on which notice is given under subsection (3), and the Authority may not issue the revised rules in question before—

(a) that period of 14 days expires, or

(b) the Minister notifies the Authority that no direction under subsection (4) will be given in relation to the revised rules,

whichever is the sooner.

(6) Once the Authority has issued the revised rules, it must give notice as soon as reasonably practicable of—

(a) the issuing of the revised rules, and

(b) as regards each revision contained in them, whether in the view of the Authority the revision falls within paragraph (a) or (b) of subsection (1).

(7) Notice under subsection (6) is to be given to such persons as the Authority considers appropriate.

(8) Unless the Authority gives notice that a revision in revised rules is in the view of the Authority a revision falling within subsection (1)(a), the revision ceases to have effect at the end of the period of six months beginning with the day after that on which the revised rules are issued.

(9) In this section “the Minister” has the meaning given by section 40G.

Textual Amendments

F1 Ss. 40-40J substituted for ss. 40, 40A (6.4.2015 for the insertion of s. 40J) by Water Act 2014 (c. 21), ss. 8(1), 94(3) (with s. 8(2)); S.I. 2015/773, art. 2(1)(a)(i) (with art. 4)

40I Rules under section 40E: guidance E+W

(1) The Minister may issue guidance as to the content of rules under section 40E.

(2) Before issuing the guidance, the Minister must—

(a) prepare a draft of the proposed guidance;

(b) consult the relevant persons about the draft.

(3) The relevant persons are—

(a) the Secretary of State;

(b) the Welsh Ministers;

(c) such other persons as the Minister thinks appropriate.

(4) The Minister may from time to time revise the guidance and issue revised guidance.

(5) Subsections (2) and (3) apply to revised guidance as they apply to the original guidance.

(6) The Minister must arrange for the publication of guidance issued under this section.

(7) In this section “the Minister” means—

(a) the Secretary of State, in relation to bulk supply agreements to which all parties are—

(i) a water undertaker whose area is wholly or mainly in England, or

(ii) a person who would, if the person's application for an appointment or variation is determined in accordance with the application, be such a water undertaker;

(b) the Welsh Ministers, in relation to bulk supply agreements to which all parties are—

(i) a water undertaker whose area is wholly or mainly in Wales, or

(ii) a person who would, if the person's application for an appointment or variation is determined in accordance with the application, be such a water undertaker;

(c) the Secretary of State and the Welsh Ministers acting jointly, in relation to bulk supply agreements to which—

(i) a person falling within paragraph (a)(i) or (ii) is party, and

(ii) a person falling within paragraph (b)(i) or (ii) is party.

Textual Amendments

F1 Ss. 40-40J substituted for ss. 40, 40A (6.4.2015 for the insertion of s. 40J) by Water Act 2014 (c. 21), ss. 8(1), 94(3) (with s. 8(2)); S.I. 2015/773, art. 2(1)(a)(i) (with art. 4)

40J Duty to provide information about bulk supplies E+W

(1) A supplier under a bulk supply agreement must provide such information as the appropriate agency may request in relation to water supplied under the agreement.

(2) The requirement in subsection (1) is enforceable by the Authority under section 18.

(3) In subsection (1) “the appropriate agency” means the body that would be consulted by the Authority under section 40A(2) if the agreement were to be varied or terminated by an order under section 40A(1).]

Textual Amendments

F1 Ss. 40-40J substituted for ss. 40, 40A (6.4.2015 for the insertion of s. 40J) by Water Act 2014 (c. 21), ss. 8(1), 94(3) (with s. 8(2)); S.I. 2015/773, art. 2(1)(a)(i) (with art. 4)

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;

[F2 (ca) where the whole or any part of that locality is situated within a Mayoral development area, the Mayoral development corporation;]

(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 [F3 new towns residuary body]; and

(ii) F4 . . . the development corporation for the new town, F4 . . .;

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.

Textual Amendments

F2 S. 41(2)(ca) inserted (15.1.2012) by Localism Act 2011 (c. 20), s. 240(1)(l), Sch. 22 para. 40

F3 Words in s. 41(2)(d)(i) substituted (1.12.2008) by Housing and Regeneration Act 2008 (c. 17), ss. 56, 325, Sch. 8 para. 56; S.I. 2008/3068, art. 2(1)(w) (with savings and transitional provisions in arts. 6-13)

F4 Words in s. 41(2)(d)(ii) repealed (1.10.1998) by 1998 c. 38, s. 152, Sch. 18 Pt.IV (with ss. 137(1), 139(2), 143(2)); S.I. 1998/2244, art. 4

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—

[F5 (a) bind the person or persons mentioned in that subsection to pay to the undertaker either (at the election of such person or persons)—

(i) 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; or

(ii) following provision of the main, a single amount not exceeding the discounted aggregate deficit 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,

[F6 may be referred to the Authority for determination under section 30A above by either party to the dispute.]

[F7 (7) In this section “relevant deficit” and “discounted aggregate deficit” have the meanings given by sections 43 and 43A below, respectively.]

Textual Amendments

F5 S. 42(2)(a) substituted (28.5.2004) by Water Act 2003 (c. 37), ss. 90(2)(5), 105(3); S.I. 2004/641, art. 4(a) (with art. 6, Sch. 3)

F6 Words in s. 42(6) substituted (28.5.2004) by Water Act 2003 (c. 37), ss. 90(3)(5), 105(3); S.I. 2004/641, art. 4(a) (with art. 6, Sch. 3)

F7 S. 42(7) substituted (28.5.2004) by Water Act 2003 (c. 37), ss. 90(4)(5), 105(3); S.I. 2004/641, art. 4(a) (with art. 6, Sch. 3)

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 [F8 relevant revenue in respect of that main for that year is] 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 [F9 or procuring the provision of] any such additional capacity in an earlier main as falls to be used in consequence of the provision of the new main.

[F10 (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 pursuance of a water main requisition; or

(b) has been vested (by virtue of a declaration made under this Chapter) in the water undertaker,

in the period of twelve years immediately before the provision of the new main.]

(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.

[F11 (7) Any reference in this section to the relevant revenue in respect of a main provided by a water undertaker for any year is—

(a) in relation to premises connected with the main which are supplied with water by the undertaker, is a reference to so much of the aggregate of any charges payable to the undertaker in respect of services provided in the course of that year as represents charges which—

(i) have been imposed by the undertaker in relation to those premises; and

(ii) 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;

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

(i) are 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) are reasonably attributable to the use of that main for the purpose of the supplier supplying water to those premises.]

(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 [F12 in respect of which the conditions referred to in section 42(1) above have already been satisfied.] .

(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.

Textual Amendments

F8 Words in s. 43(1) substituted (1.12.2005) by Water Act 2003 (c. 37), ss. 101(1), 105(3), Sch. 8 para. 14(2); S.I. 2005/2714, art. 3(c) (with Sch. para. 8)

F9 Words in s. 43(4)(b) inserted (28.5.2004) by Water Act 2003 (c. 37), ss. 91(1)(a)(4), 105(3); S.I. 2004/641, art. 4(a) (with art. 6, Sch. 3)

F10 S. 43(5) substituted (28.5.2004) by Water Act 2003 (c. 37), ss. 91(1)(b)(4), 105(3); S.I. 2004/641, art. 4(a) (with art. 6, Sch. 3)

F11 S. 43(7) substituted (1.12.2005) by Water Act 2003 (c. 37), ss. 101(1), 105(3), Sch. 8 para. 14(3); S.I. 2005/2714, art. 3(c) (with Sch. para. 8)

F12 Words in s. 43(8)(b) substituted (28.5.2004) by Water Act 2003 (c. 37), ss. 91(1)(c)(4), 105(3); S.I. 2004/641, art. 4(a) (with art. 6, Sch. 3)

Marginal Citations

M3 1991 c. 60.

M4 1989 c. 15.

M5 1945 c. 42.

[F13 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

F13 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

[F14 (b) the water undertaker has not, before the end of that period, so laid the water main to be provided as to enable (as the case may be)—

(i) service pipes to premises in that locality; or

(ii) a water main which is the subject of an agreement under section 51A below (“the self-laid main”),

to connect with the main at the place or 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 [F15 the Authority] 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 [F16 the Authority] , 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 [F17 , or (as the case may be) the self-laid main,] to connect with the water main.

[F18 (4) A reference for the purposes of subsection (2) or (3) above may be made to the Authority for determination under section 30A above by either party to the dispute.]

(5) In this section “relevant day”, in relation to a requirement to provide a water main F19 . . . , 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

[F20 (b) the day on which the place or places where (as the case may be)—

(i) service pipes to premises in the locality in question; or

(ii) the self-laid main,

will connect with the main are determined under subsection (3) above.]

Textual Amendments

F14 S. 44(1)(b) substituted (28.5.2004) by Water Act 2003 (c. 37), ss. 91(3)(a)(4), 105(3); S.I. 2004/641, art. 4(a) (with art. 6, Sch. 3)

F15 Words in s. 44(2)(b) substituted (28.5.2004) by Water Act 2003 (c. 37), ss. 91(3)(b)(4), 105(3); S.I. 2004/641, art. 4(a) (with art. 6, Sch. 3)

F16 Words in s. 44(3)(b) substituted (28.5.2004) by Water Act 2003 (c. 37), ss. 91(3)(c)(i)(4), 105(3); S.I. 2004/641, art. 4(a) (with art. 6, Sch. 3)

F17 Words in s. 44(3)(b) inserted (28.5.2004) by Water Act 2003 (c. 37), ss. 91(3)(c)(ii)(4), 105(3); S.I. 2004/641, art. 4(a) (with art. 6, Sch. 3)

F18 S. 44(4) substituted (28.5.2004) by Water Act 2003 (c. 37), ss. 91(3)(d)(4), 105(3); S.I. 2004/641, art. 4(a) (with art. 6, Sch. 3)

F19 Words in s. 44(5) omitted (28.5.2004) and repealed (1.4.2005) by virtue of Water Act 2003 (c. 37), ss. 91(3)(e)(4), 101(2), 105(3), Sch. 9 Pt. 3; S.I. 2004/641, art. 4(a) (with art. 6, Sch. 3); S.I. 2005/968, art. 2(n) (with savings in art. 4, Schs. 1, 2)

F20 S. 44(5)(b) substituted (28.5.2004) by Water Act 2003 (c. 37), ss. 91(3)(e)(ii)(4), 105(3); S.I. 2004/641, art. 4(a) (with art. 6, Sch. 3)