Water Industry Act 1991

Valid from 28/05/2004

[F1 51C Financial conditions of compliance E+W

(1) This section applies where an agreement is, or is to be, entered into under section 51A above in relation to a water main (“the adopted main”) by, or on behalf of, a water undertaker and a person constructing or proposing to construct that water main.

(2) Where this section applies, the water undertaker may, as a condition of the undertaker’s compliance with the agreement, require that person to pay to it the costs mentioned in subsection (3) below.

(3) The costs are those reasonably incurred by the undertaker in connection with the adopted main equivalent to the costs referred to in section 43(4)(a) and (b) above, as if references there (and in section 43(5)) to the provision of the new main were references to the incorporation of the adopted main into the undertaker’s supply system.

(4) For the purposes of any payment required to be made by virtue of subsection (2) above, the water undertaker may require the person to provide such security as it may reasonably request, and the provisions of subsections (4) and (5) of section 42 above shall apply to any security so required as they apply to security required under that section.

(5) Where this section applies, the water undertaker shall pay to the person referred to in subsection (1) above, upon declaring the water main to be vested in the undertaker, a sum equal to the discounted offset amount.

(6) For the purposes of subsection (5) above, the discounted offset amount is the sum of the estimated offsets for each of the twelve years following the vesting in the undertaker of the water main, in each case discounted in accordance with subsection (9) below.

(7) The estimated offset for any year is the lesser of—

(a) the estimated revenue (if any) in respect of the adopted main for that year; and

(b) the annual borrowing costs of a loan of the amount required for the provision of that main.

(8) The amounts referred to in paragraphs (a) and (b) of subsection (7) above shall be calculated in accordance with the provisions of subsections (3) to (5) of section 43A above as if the adopted main had been provided in pursuance of a water main requisition (as defined in section 43 above).

(9) The estimated offset for a year 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.

(10) A determination made by the Authority for the purposes of subsection (9) above—

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

(b) may be revoked at any time except in relation to an adopted main in respect of which the agreement referred to in subsection (1) above has already been made.

(11) Any dispute between the water undertaker and the other person as to the payments required to be made or the security required to be provided by virtue of this section may be referred to the Authority for determination under section 30A above by either party to the dispute.]

Textual Amendments

F1 Ss. 51A-51E and preceding cross-heading inserted (28.5.2004) by Water Act 2003 (c. 37), ss. 92(1), 105(3); S.I. 2004/641, art. 4(a) (with art. 6, Sch. 3)