Where by virtue of any enactment including any enactment in this Act) or of any agreement F1Scottish Water is under an obligation to which this section applies, F2Scottish Water and the person having the vested interest in the obligation may F3 . . . enter into an agreement to terminate the obligation on such terms and conditions as to compensation or otherwise as they may agree; and any such agreement shall be enforceable against any person deriving title from the person who entered into the agreement.

The Secretary of State may, on the application of F4Scottish Water and after affording to the person having the vested interest in the obligation an opportunity of making representations to the Secretary of State, whether in writing or on being heard by a person appointed by the Secretary of State, by order provide for the termination compulsorily of an obligation to which this section applies on payment of compensation, the amount of which shall, in default of agreement, be determined in manner provided by the Lands Clauses Acts with references to the taking of lands otherwise than by agreement, and the order may contain such incidental, consequential and supplementary provisions, including provisions for the amendment and repeal of any local enactment, as the Secretary of State thinks necessary or expedient.

The amount of the compensation to be paid under subsection (2) shall be assesed by reference to the value of the rights secured under the obligation as at the date of the making of the order, and in assessing that value regard shall be had to F5the amount of any charge F6for a supply of water which may reasonably be expected to become payable as a result of the termination of the obligation.

This section applies to any obligation on the part of F7Scottish Water providing to any person other than a F8local authority. . . a supply of water (whether for domestic purposes or for purposes other than domestic purposes) to provide that supply free of charge or on terms more favourable to the person having the vested interest in the obligation than those which apart from the obligation would be applicable.

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An obligation to furnish a supply of water or to grant a wayleave for pipes or to give any other benefit or advantage to F12Scottish Water entered into in consideration of an obligation to which this section applies shall not be deemed to be terminated by reason only of the termination under this section of the last mentioned obligation.

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