Water Act 1989

72 Financial conditions of sewer requisition

(1) The conditions mentioned in section 71(1)(c) above are satisfied in relation to a requirement for the provision of a public sewer by a sewerage 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 sewer; 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—

(i) by virtue of section 71(3)(a) or (b) above required or joined in requiring the provision of the sewer; and

(ii) is not a public authority.

(2) The undertakings which a sewerage undertaker may require for the purposes of subsection (1) above in respect of any public sewer are undertakings which bind the person or persons mentioned in that subsection (in the case of two or more persons, either jointly and severally or with liability to pay apportioned in such manner as those persons may agree) to pay to the undertaker, in respect of each of the twelve years following the provision of the sewer, an amount not exceeding the relevant deficit (if any) for that year on that sewer.

(3) For the purposes of this section the relevant deficit for any year on a public sewer is the amount (if any) by which the drainage charges payable for the use during that year of that sewer are exceeded by the annual borrowing costs of a loan of the amount required for the provision of that sewer.

(4) The annual borrowing costs of a loan of the amount required for the provision of a public sewer 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 sewer as were not incurred in the provision of additional capacity had been borrowed, by the sewerage undertaker providing the sewer, 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 either by the undertaker with the approval of the Director or, in default of such a determination, by the Director.

(5) The costs of providing a public sewer (“the new sewer”) shall include—

(a) the costs reasonably incurred in providing such other public sewers and such pumping stations as it is necessary to provide in consequence of the provision of the new sewer; and

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

and in this subsection “earlier public sewer”, in relation to the new sewer, means any public sewer which has been provided in the period of twelve years immediately before the provision of the new sewer and was so provided in pursuance of a requirement under section 71 above, under section 16 of the 1973 Act (requisitioning of sewers) or under any local statutory provision corresponding to the said section 71 or 16.

(6) Any reference in this section to the provision of additional capacity in a public sewer 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 sewer as are carried out or done for the purpose of enabling that sewer to be used for purposes in addition to those for which it is necessary to provide the sewer in order to comply with the requirement.

(7) For the purposes of this section references to the drainage charges payable for the use during any year of any sewer provided by a sewerage undertaker are references to so much of the aggregate of any charges payable to the sewerage 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 such of the premises connected with that sewer as are premises where there are buildings; and

(b) are reasonably attributable to the use of that sewer for the drainage for domestic purposes of those premises or to the disposal of effluent drained for domestic purposes from those premises;

and the references in this subsection to domestic purposes shall be construed as references to any of the purposes mentioned in subsection (2)(a) of section 71 above.

(8) Where for the purposes of subsection (1)(b) above any sums have been deposited with a sewerage 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.

(9) An approval or determination given or made by the Director for the purposes of subsection (4) or (8) above—

(a) may be given or made in relation to the provision of a particular public sewer, in relation to the provision of sewers of a particular description or in relation to the provision of sewers generally; and

(b) may be revoked at any time except, in the case of an approval or determination for the purposes of subsection (4) above, in relation to a public sewer that has already been provided.

(10) Any dispute between a sewerage 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.