Water Industry Act 1991

Part IIIE+W WATER SUPPLY

chapter IE+W GENERAL DUTIES OF WATER UNDERTAKERS [F1etc]

37 General duty to maintain water supply system etc.E+W

(1)It shall be the duty of every water undertaker to develop and maintain an efficient and economical system of water supply within its area and to ensure that all such arrangements have been made—

(a)for providing supplies of water to premises in that area and for making such supplies available to persons who demand them; and

(b)for maintaining, improving and extending the water undertaker’s water mains and other pipes,

as are necessary for securing that the undertaker is and continues to be able to meet its obligations under this Part.

(2)The duty of a water undertaker under this section shall be enforceable under section 18 above—

(a)by the Secretary of State; or

(b)with the consent of or in accordance with a general authorisation given by the Secretary of State, by the Director.

(3)The obligations imposed on a water undertaker by the following Chapters of this Part, and the remedies available in respect of contraventions of those obligations, shall be in addition to any duty imposed or remedy available by virtue of any provision of this section or section 38 below and shall not be in any way qualified by any such provision.

[F237AWater resources management plans: preparation and reviewE+W

(1)It shall be the duty of each water undertaker to prepare [F3, publish] and maintain a water resources management plan.

(2)A water resources management plan is a plan for how the water undertaker will manage and develop water resources so as to be able, and continue to be able, to meet its obligations under this Part.

(3)A water resources management plan shall address in particular—

(a)the water undertaker’s estimate of the quantities of water required to meet those obligations;

(b)the measures which the water undertaker intends to take or continue for the purpose set out in subsection (2) above (also taking into account for that purpose the introduction of water into the undertaker’s supply system by or on behalf of [F4water supply licensees]);

(c)the likely sequence and timing for implementing those measures; and

(d)such other matters as the Secretary of State may specify in directions

[F5(and see also section 37AA).]

(4)The procedure for preparing [F6and publishing] a water resources management plan (including a revised plan) is set out in section 37B below.

(5)Before each anniversary of the date when its plan (or revised plan) was last published, the water undertaker shall —

(a)review its plan; and

(b)send a statement of the conclusions of its review to the Secretary of State.

(6)The water undertaker shall prepare [F7and publish] a revised plan in each of the following cases—

(a)following conclusion of its annual review, if the review indicated a material change of circumstances;

(b)if directed to do so by the Secretary of State;

(c)in any event, not later than the end of the period of five years beginning with the date when the plan (or revised plan) was last published,

and shall follow the procedure in section 37B below (whether or not the revised plan prepared by the undertaker includes any proposed alterations to the previous plan).

(7)The Secretary of State may give directions specifying—

(a)the form which a water resources management plan must take;

(b)the planning period to which a water resources management plan must relate.

(8)Before preparing its water resources management plan (including a revised plan), the water undertaker shall consult—

(a)the Environment Agency[F8, if the plan (or revised plan) would affect water resources in England;]

[F9(aa)the NRBW, if the plan (or revised plan) would affect water resources in Wales;]

(b)the Authority;

(c)the Secretary of State; and

(d)any [F10water supply licensee] which supplies water to premises in the undertaker’s area via the undertaker’s supply system.

[F11(9)Before giving a direction under subsection (6)(b), the Secretary of State shall consult—

(a)the Environment Agency, if the revised plan would affect water resources in England, and

(b)the NRBW, if the revised plan would affect water resources in Wales.

(9A)Before giving a direction under subsection (6)(b), the Welsh Ministers shall consult—

(a)the NRBW, if the revised plan would affect water resources in Wales, and

(b)the Environment Agency, if the revised plan would affect water resources in England.]

(10)In this section, in relation to a water resources management plan, “published” means published in accordance with section 37B(8)(a) below.

[F1237AAWater resources management plans for England: resilienceE+W

(1)The Secretary of State may give a direction about the basis on which a water resources management plan for England is to be prepared.

(2)A direction under this section may be given only where the Secretary of State considers it appropriate to do so with a view to securing that a water undertaker is able to meet the need for the supply of water to consumers in particular circumstances.

(3)A direction under this section may, in particular, require a plan to be prepared on the basis of a specified assumption, including—

(a)an assumption as to whether, and how often, specified circumstances are likely to arise;

(b)an assumption that a specified power would or would not be exercised by the water undertaker or another person in specified circumstances.

(4)Before giving a direction under this section, the Secretary of State must consult—

(a)the Authority,

(b)the Welsh Ministers,

(c)each water undertaker to which the direction would apply,

(d)the Environment Agency,

(e)the NRBW, and

(f)such other persons as the Secretary of State considers appropriate.

(5)In this section—

• “specified” means specified in a direction under this section;

• “water resources management plan for England” means a water resources management plan prepared by a water undertaker whose area is wholly or mainly in England.]

37BWater resources management plans: publication and representationsE+W

(1)A water undertaker shall—

(a)send a draft water resources management plan to the Secretary of State;

(b)state whether it appears to the undertaker that any information contained in that plan is or might be commercially confidential (as regards itself or another person); and

(c)give the Secretary of State the name of each such other person and his address for service of a notice under subsection (2)(a) below.

(2)If the water undertaker states that it so appears in relation to any such information, the Secretary of State shall—

(a)if the person to whom or to whose business the information relates is not the water undertaker, give that person notice that the information is included in a draft water resources management plan and, unless subsection (10) below applies, is required to be published under this section; and

(b)give each person (including the water undertaker) to whom any such information relates a reasonable opportunity—

(i)of objecting to the publication of the information relating to him on the ground that it is commercially confidential; and

(ii)of making representations to the Secretary of State for the purpose of justifying any such objection,

and shall determine, taking any objections and representations under paragraph (b) into account, whether the information is or is not commercially confidential.

(3)A water undertaker shall—

(a)(subject to subsection (10) below) publish the draft water resources management plan in the prescribed way or, if no way is prescribed, in a way calculated to bring it to the attention of persons likely to be affected by it;

(b)publish with it a statement—

(i)whether any information has been excluded from the published draft plan by virtue of subsection (10) below and, if it has, the general nature of that information; and

(ii)that any person may make representations in writing about the plan to the Secretary of State before the end of a period specified in the statement; and

(c)send a copy of the published draft plan and accompanying statement to such persons (if any) as may be prescribed.

(4)The Secretary of State shall send to the water undertaker a copy of any representations he receives following publication of the draft plan under subsection (3) above and shall give it a reasonable period of time within which to comment on the representations.

(5)The Secretary of State may in regulations prescribe how such representations and any comments by the water undertaker on them are to be dealt with.

(6)Regulations under subsection (5) above—

(a)may provide for the Secretary of State to cause an inquiry or other hearing to be held in connection with the draft water resources management plan; and

(b)if they do so provide, may provide for subsections (2) to (5) of section 250 of the Local Government Act 1972 (local inquiries: evidence and costs) to apply with prescribed modifications to such an inquiry or hearing as they apply to inquiries under that section.

(7)The Secretary of State may direct a water undertaker that its water resources management plan must differ from the draft sent to him under subsection (1) above in ways specified in his direction, and (subject to subsection (9) below) it shall be the duty of the water undertaker to comply with the direction.

(8)The water undertaker shall—

(a)(subject to subsection (10) below) publish the water resources management plan in the prescribed way or, if no way is prescribed, in a way calculated to bring it to the attention of persons likely to be affected by it; and

(b)publish with it a statement whether any information has been excluded from the published plan by virtue of subsection (10) below and, if it has, the general nature of that information.

(9)If the water undertaker considers that publishing a water resources management plan complying with a direction under subsection (7) above would mean including in the published plan any information (other than any information in relation to which the Secretary of State has already made a determination under subsection (2) above) which might be commercially confidential (as regards itself or another person)—

(a)the water undertaker shall send the Secretary of State a notice saying so, and giving the Secretary of State the name of any such other person and his address for service of a notice under subsection (2)(a) above as applied by paragraph (b) below; and

(b)subsection (2) above shall apply in relation to that information as it applies in relation to the information referred to there;

and the Secretary of State may either confirm his direction under subsection (7) above (which is to be treated as a new direction under subsection (7)) or revoke the previous such direction (or the previous one so treated) and give a new one.

(10)The published version of a draft water resources management plan published under subsection (3)(a) above, and a water resources management plan published under subsection (8)(a) above, shall exclude any information which the Secretary of State—

(a)has determined under subsection (2) above (or that subsection as applied by subsection (9) above) is commercially confidential; or

(b)directs the water undertaker to exclude on the ground that it appears to him that its publication would be contrary to the interests of national security.

(11)Any steps to be taken by a water undertaker under this section shall be completed by such time or within such period as the Secretary of State may direct.

37CWater resources management plans: provision of informationE+W

(1)It shall be the duty of each [F13water supply licensee] to provide the water undertaker with such information as the water undertaker may reasonably request for the purposes of preparing or revising its water resources management plan.

(2)In the event of any dispute between a water undertaker and a [F13water supply licensee] as to the reasonableness of the water undertaker’s request under subsection (1) above, either party may refer the matter for determination by the Secretary of State, and any such determination shall be final.

(3)For the purposes of paragraph (b) of section 37B(1) above, the water undertaker shall identify in its statement under that paragraph any information—

(a)provided by a [F13water supply licensee] pursuant to subsection (1) above; and

(b)contained in the water undertaker’s draft water resources management plan,

which the [F13water supply licensee] has (at the time of providing it to the water undertaker) specifically identified as being, in the [F14water supply licensee's] opinion, commercially confidential.

(4)The water undertaker shall not use any unpublished information save for the purpose of facilitating the performance by it of any of the duties imposed on it by or under this Act, any of the other consolidation Acts or the Water Act 1989.

(5)In subsection (4) above—

(a)“unpublished information” means confidential information which—

(i)is provided to the water undertaker by a [F13water supply licensee] under this section;

(ii)relates to the affairs of any individual or to any particular business; and

(iii)by virtue of section 37B above, is not published;

(b)“the other consolidation Acts” has the same meaning as in section 206 below.

37DWater resources management plans: supplementaryE+W

(1)Directions given under section 37A [F15, 37AA] or 37B above may be—

(a)general directions applying to all water undertakers; or

(b)directions applying only to one or more water undertakers specified in the directions,

and shall be given by an instrument in writing.

(2)It shall be the duty of each water undertaker to whom directions apply to comply with the directions.

(3)The duties of—

(a)a water undertaker under sections 37A to 37C above and under this section; and

(b)a [F16water supply licensee] under section 37C above,

shall be enforceable by the Secretary of State under section 18 above.

[F17(4)The Minister may by order made by statutory instrument amend the period for the time being specified in section 37A(6)(c).

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

(a)the Secretary of State, in relation to an order applying to water undertakers whose areas are wholly or mainly in England, and

(b)the Welsh Ministers, in relation to an order applying to water undertakers whose areas are wholly or mainly in Wales.

(6)A statutory instrument containing an order made by the Secretary of State under subsection (4) is subject to annulment in pursuance of a resolution of either House of Parliament.

(7)A statutory instrument containing an order made by the Welsh Ministers under subsection (4) is subject to annulment in pursuance of a resolution of the Assembly.

(8)Subsection (9) applies in relation to a statutory instrument containing both—

(a)an order made by the Secretary of State under subsection (4), and

(b)an order made by the Welsh Ministers under subsection (4).

(9)If in accordance with subsection (6) or (7) (negative resolution procedure)—

(a)either House of Parliament resolves that an address be presented to Her Majesty praying that an instrument containing an order made by the Secretary of State be annulled, or

(b)the Assembly resolves that an instrument containing an order made by the Welsh Ministers be annulled,

the instrument is to have no further effect and Her Majesty may by Order in Council revoke the instrument.]]

38 Standards of performance in connection with water supply.E+W

(1)For the purpose-

(a)of facilitating the determination of the extent to which breaches of the obligations imposed by the following provisions of this Part are to amount to breaches of the duty imposed by section 37 above; or

(b)of supplementing that duty by establishing overall standards of performance in relation to that duty,

the Secretary of State may, in accordance with section 39 below, by regulations provide for contraventions of such requirements as may be prescribed to be treated for the purposes of this Act as breaches of that duty.

(2)The Secretary of State may, in accordance with section 39 below, by regulations prescribe such standards of performance in connection with the provision of supplies of water as, in his opinion, ought to be achieved in individual cases.

(3)Regulations under subsection (2) above may provide that if a water undertaker fails to meet a prescribed standard it shall pay such amount as may be prescribed to any person who is affected by the failure and is of a prescribed description.

(4)Without prejudice to the generality of the power conferred by subsection (2) above, regulations under that subsection may—

(a)include in a standard of performance a requirement for a water undertaker, in prescribed circumstances, to inform a person of his rights by virtue of any such regulations;

(b)provide for any dispute under the regulations to be referred by either party to the dispute to the Director;

(c)make provision for the procedure to be followed in connection with any such reference and for the Director’s determination on such a reference to be enforceable in such manner as may be prescribed;

(d)prescribe circumstances in which a water undertaker is to be exempted from requirements of the regulations.

F18[(5)Where the Director determines any dispute in accordance with regulations under this section he shall, in such manner as may be specified in the regulations, give his reasons for reaching his decision with respect to the dispute.]

[F1938ZAStandards of performance in connection with the supply of water: water supply licenseesE+W

(1)For the purpose of establishing overall standards of performance in connection with the supply of water by water supply licensees in accordance with their retail authorisations or restricted retail authorisations, the Minister may, in accordance with section 39ZA, by regulations—

(a)impose requirements in connection with such supplies of water;

(b)provide for a requirement so imposed to be enforceable under section 18 by—

(i)the Minister, or

(ii)the Authority, with the consent of or in accordance with a general authorisation given by the Secretary of State.

(2)The Minister may, in accordance with section 39ZA, by regulations prescribe such standards of performance in connection with the provision of supplies of water as, in the Minister's opinion, ought to be achieved in individual cases.

(3)Regulations under subsection (2) may provide that if a water supply licensee fails to meet a prescribed standard the licensee must pay such amount as may be prescribed to any person who—

(a)is affected by the failure, and

(b)is of a prescribed description.

(4)Without prejudice to the generality of the power conferred by subsection (2), regulations under subsection (2) may—

(a)include in a standard of performance a requirement for a water supply licensee, in prescribed circumstances, to inform a person of that person's rights by virtue of any such regulations;

(b)provide for a dispute under the regulations to be referred by either party to the dispute to the Authority;

(c)make provision for the procedure to be followed in connection with any such reference and for the Authority's determination on such a reference to be enforceable in such manner as may be prescribed;

(d)prescribe circumstances in which a water supply licensee is to be exempted from requirements of the regulations.

(5)Where the Authority determines any dispute in accordance with regulations under this section it must, in such manner as may be specified in the regulations, give its reasons for reaching its decision with respect to the dispute.

(6)In this section—

• “the Minister” means—

  (a)

  the Secretary of State, in relation to supplies of water made in accordance with a retail authorisation;

  (b)

  the Welsh Ministers, in relation to supplies of water made in accordance with a restricted retail authorisation;

• “prescribed” means prescribed by regulations made by the Minister.]

[38AF20Information with respect to levels of performance.E+W

(1)The Director shall from time to time collect information with respect to—

(a)the compensation paid by water undertakers under regulations under section 38(2) above; F21...

[F22(aa)the compensation paid by water supply licensees under regulations under section 38ZA(2); and]

(b)the levels of overall performance achieved by water undertakers [F23or water supply licensees] in connection with the provision of water supplies.

(2)At such times as the Director may direct, each water undertaker shall give the following information to the Director—

(a)as respects each standard prescribed by regulations under section 38(2) above, the number of cases in which compensation was paid and the aggregate amount or value of that compensation; and

(b)as respects each standard established by regulations under section 38(1)(b) above, such information with respect to the level of performance achieved by the undertaker as may be so specified.

[F24(2A)At such times as the Authority may direct, each water supply licensee is to give the following information to the Authority—

(a)as respects each standard established by regulations under section 38ZA(1), such information with respect to the level of performance achieved by the licensee as may be specified in the direction;

(b)as respects each standard prescribed by regulations under section 38ZA(2), the number of cases in which compensation was paid and the aggregate amount or value of that compensation.]

[F25(3)The requirements in subsections (2) and (2A) are enforceable by the Authority under section 18.]

(4)The Director shall, at least once in every year, arrange for the publication, in such form and in such manner as he considers appropriate, of such of the information collected by or given to him under this section as it may appear to him expedient to give to customers or potential customers of water undertakers [F26or water supply licensees].

(5)In arranging for the publication of any such information the Director shall have regard to the need for excluding, so far as practicable—

(a)any matter which relates to the affairs of an individual, where publication of that matter would or might, in the opinion of the Director, seriously and prejudicially affect the interests of that individual; and

(b)any matter which relates specifically to the affairs of a particular body of persons, whether corporate or unincorporate, where publication of that matter would or might, in the opinion of the Director, seriously and prejudicially affect the interests of that body.]

[F2738BPublication of statistical information about complaintsE+W

(1)It shall be the duty of the Council to publish, in such form and manner and with such frequency as it thinks appropriate, such statistical information as it considers appropriate relating to complaints made by consumers about any matter relating to the activities of water undertakers or [F28water supply licensees] and the handling of such complaints.

(2)In subsection (1) above, “complaints” includes complaints made directly to water undertakers or [F29water supply licensees] (or anyone carrying on activities on their behalf) and complaints to the Authority, the Council, the Assembly or the Secretary of State.]

39 Procedure for regulations under section 38.E+W

[F30(A1)The Secretary of State may make regulations under section 38 above—

(a)on an application by the Authority, in accordance with subsections (1) to (3) below; or

(b)otherwise than on such an application, in accordance with subsections (4) to (8) below.]

(1)[F31Where the Authority has made to the Secretary of State a written application complying with subsection (2) below, the Secretary of State may make regulations under section 38 above if—]

F32[(b) the Secretary of State is satisfied that a copy of the application has been served by the Director—

(i)on every water undertaker specified in the application;F33. . .

(ii)on persons or bodies appearing to the Secretary of State to be representative of persons likely to be affected by the regulations;]

[F34(iii)on the Council; and

(iv)on such other persons or bodies as the Secretary of State may consider appropriate;]

(c)such period as the Secretary of State considers appropriate has been allowed for the making—

(i)by the Director; and

(ii)by any affected water undertaker [F35or person or body on whom a copy of the application has been served under paragraph [F36(b)] above],

of representations or objections with respect to the Director’s proposals and any modifications proposed by the Secretary of State; and

(d)the Secretary of State has considered [F37the summary mentioned in subsection (2)(bb) below,] the Director’s reasons for his proposals and every representation or objection which has been duly made with respect to those proposals, or any proposed modifications of those proposals, and has not been withdrawn.

F38[(1A)Before making an application to the Secretary of State under this section the Director shall arrange for such research as he considers appropriate with a view to discovering the views of a representative sample of persons likely to be affected and consider the results.]

(2)An application made by the Director to the Secretary of State complies with this subsection if it—

(a)sets out [F39the Authority’s proposals for the making of] regulations under section 38 above;

(b)specifies the water undertaker or undertakers in relation to which it is proposed [F40the regulations] should apply

F41[(bb) is accompanied by a written summary of the results of the research carried out in accordance with subsection (1A) above;] ; and

(c)summarises the Director’s reasons for his proposals.

(3)The Secretary of State shall not make any regulations [F42on an application by the Authority under this section] except where—

(a)the only provisions of the regulations are [F43those which in the opinion of the Secretary of State give effect to the proposals set out in the Authority’s application or to those proposals] with such modifications as the Secretary of State considers appropriate; and

(b)each of the modifications (if any) of the Director’s proposals to which effect is given by the regulations is a modification the proposal to make which has been notified—

(i)to the Director;F44. . .

(ii)to any water undertaker appearing to the Secretary of State to be likely to be affected by the modifications [F45and

(iii)to any person or body on whom a copy of the Authority’s application was served under subsection (1)(b) above.]

[F46(4)Where no such application as is mentioned in subsection (1) above has been made, the Secretary of State may make regulations under section 38 above only if he considers—

(a)that the regulations will contribute towards the attainment of policies relating to public health or the environment; or

(b)(if he does not consider that they will so contribute) that there are exceptional reasons why it is otherwise in the public interest that the regulations should be made.

(5)Before making regulations under section 38 above by virtue of subsection (4) above, the Secretary of State shall—

(a)give notice of his proposals;

(b)consider the results of the research carried out in accordance with subsection (7) below; and

(c)consider every representation or objection with respect to the proposals which has been duly made and not withdrawn.

(6)A notice under subsection (5)(a) above must—

(a)summarise the Secretary of State’s reasons for his proposals;

(b)specify the water undertaker or undertakers in relation to which it is proposed the regulations should apply; and

(c)specify the period within which objections or representations with respect to the proposals may be made.

(7)Before giving notice under subsection (5)(a) above the Secretary of State shall arrange for such research as he considers appropriate with a view to discovering the views of a representative sample of persons likely to be affected.

(8)A notice under subsection (5)(a) above shall be given by serving a copy on—

(a)the Authority;

(b)the Council;

(c)every water undertaker to which the regulations will apply;

(d)persons or bodies appearing to the Secretary of State to be representative of persons likely to be affected by the regulations; and

(e)such other persons or bodies as the Secretary of State may consider appropriate.]

[F4739ZAProcedure for regulations under section 38ZAE+W

(1)Section 39 applies for the purposes of making regulations under section 38ZA as it applies for the purposes of making regulations under section 38.

(2)In the application of section 39 by virtue of subsection (1)—

(a)a reference to a water undertaker is to be treated as a reference to a water supply licensee, and

(b)a reference to the Secretary of State is to be treated as a reference to the Minister (as defined in section 38ZA(6)).

(3)Regulations under section 38ZA are to be made by statutory instrument.

(4)A statutory instrument containing regulations under section 38ZA is subject to annulment in pursuance of a resolution of—

(a)either House of Parliament, in the case of regulations made by the Secretary of State;

(b)the Assembly, in the case of regulations made by the Welsh Ministers.

(5)Section 213(2) to (2B) applies to regulations made by the Welsh Ministers under section 38ZA as it applies to regulations made by the Secretary of State.]

[39AF48Information to be given to customers about overall performance.E+W

(1)Each water undertaker shall, in such form and manner and with such frequency as the Director may direct, take steps to inform its customers [F49, and, if the direction so specifies, [F50water supply licensees] using the undertaker’s supply system for the purpose of supplying water to the premises of customers or those customers,] of—

(a)the standards of overall performance established under section 38(1)(b) above which are applicable to that undertaker; and

(b)that undertaker’s level of performance as respects each of those standards.

[F51(1A)Each water supply licensee must, in such form and manner and with such frequency as the Authority may direct, take steps to inform the licensee's customers of—

(a)the standards of overall performance established under section 38ZA(1) which are applicable to that licensee;

(b)that licensee's level of performance as regards those standards.

(1B)The Authority may direct that the requirement in subsection (1A) is not to apply to such water supply licensees as may be specified in the direction.]

(2)In giving [F52a direction under subsection (1) or (1A)] , the Director shall not specify a frequency of less than once in every period of twelve months.

[F53(2A)The [F54water supply licensees] referred to in subsection (1) above shall, if the Authority so directs, pass on the information about the matters mentioned in that subsection to their customers.

(2B)In subsection (1) above, the reference to the water undertaker’s supply system shall be construed in accordance with [F55section 17B] above.]

(3)The duty of a water undertaker [F56or [F57water supply licensee]] to comply with this section shall be enforceable by the Director under section 18 above.]

[F5839BDrought plans: preparation and reviewE+W

(1)It shall be the duty of each water undertaker to prepare [F59, publish] and maintain a drought plan.

(2)A drought plan is a plan for how the water undertaker will continue, during a period of drought, to discharge its duties to supply adequate quantities of wholesome water, with as little recourse as reasonably possible to drought orders or drought permits under Chapter 3 of Part 2 of the Water Resources Act 1991.

(3)The duties referred to in subsection (2) above include in particular those imposed under or by virtue of—

(a)section 37 above;

(b)sections 67 to 69 below.

(4)A drought plan shall address, in particular, the following matters—

(a)what measures the water undertaker might need to take to restrain the demand for water within its area;

(b)what measures the water undertaker might need to take to obtain extra water from other sources (also taking into account for that purpose the introduction of water into the undertaker’s supply system by or on behalf of [F60water supply licensees]);

(c)how the water undertaker will monitor the effects of the drought and of the measures taken under the drought plan;

(d)such other matters as the Secretary of State may specify in directions.

(5)Section 37B above (water resources management plans: publication and representations), including any power in that section to make regulations or give directions, applies in relation to drought plans (including revised plans) as it applies in relation to water resources management plans.

(6)Each water undertaker shall review (or further review) its drought plan and prepare [F61and publish] a revised plan in each of the following cases—

(a)if there is a material change of circumstances;

(b)if directed to do so by the Secretary of State;

(c)in any event, not later than the end of the period of [F62five years] beginning with the date when the plan (or revised plan) was last published in accordance with section 37B(8)(a) above as applied by subsection (5) above,

and shall follow the procedure in section 37B above as applied by subsection (5) above (whether or not the revised plan prepared by the undertaker includes any proposed alterations to the previous plan).

(7)Before preparing its drought plan (including a revised plan), the water undertaker shall consult—

(a)the Environment Agency[F63, if the plan (or revised plan) would affect water resources in England;]

[F64(aa)the NRBW, if the plan (or revised plan) would affect water resources in Wales;]

(b)the Authority;

(c)the Secretary of State; and

(d)any [F65water supply licensee] which supplies water to premises in the undertaker’s area via the undertaker’s supply system.

(8)The Secretary of State may give directions specifying the form which a drought plan must take.

(9)Directions given under this section (including directions given under section 37B above as applied by subsection (5) above) may be—

(a)general directions applying to all water undertakers; or

(b)directions applying only to one or more water undertakers specified in the directions,

and shall be given by an instrument in writing.

(10)It shall be the duty of each water undertaker to whom directions apply to comply with the directions.

[F66(11)Before giving a direction under subsection (6)(b), the Secretary of State shall consult—

(a)the Environment Agency, if the revised plan would affect water resources in England, and

(b)the NRBW, if the revised plan would affect water resources in Wales.

(11A)Before giving a direction under subsection (6)(b), the Welsh Ministers shall consult—

(a)the NRBW, if the revised plan would affect water resources in Wales, and

(b)the Environment Agency, if the revised plan would affect water resources in England.]

(12)The duty of a water undertaker under this section shall be enforceable by the Secretary of State under section 18 above.

39CDrought plans: provision of informationE+W

(1)It shall be the duty of each [F67water supply licensee] to provide the water undertaker with such information as the water undertaker may reasonably request for the purposes of preparing or revising its drought plan.

(2)In the event of any dispute between a water undertaker and a [F67water supply licensee] as to the reasonableness of the water undertaker’s request under subsection (1) above, either party may refer the matter for determination by the Secretary of State, and any such determination shall be final.

(3)For the purposes of paragraph (b) of section 37B(1) above as applied by section 39B(5) above, the water undertaker shall identify in its statement under that paragraph any information—

(a)provided by a [F67water supply licensee] pursuant to subsection (1) above; and

(b)contained in the water undertaker’s draft drought plan,

which the [F67water supply licensee] has (at the time of providing it to the water undertaker) specifically identified as being, in the [F68water supply licensee's] opinion, commercially confidential.

(4)The water undertaker shall not use any unpublished information save for the purpose of facilitating the performance by it of any of the duties imposed on it by or under this Act, any of the other consolidation Acts or the Water Act 1989.

(5)In subsection (4) above—

(a)“unpublished information” means confidential information which—

(i)is provided to the water undertaker by a [F67water supply licensee] under this section;

(ii)relates to the affairs of any individual or to any particular business; and

(iii)by virtue of section 37B above as applied by section 39B(5) above, is not published;

(b)“the other consolidation Acts” has the same meaning as in section 206 below.

(6)The duties of a [F67water supply licensee] and a water undertaker under this section shall be enforceable by the Secretary of State under section 18 above.]

[F6939DDrought plans: supplementaryE+W

(1)The Minister may by order made by statutory instrument amend the period for the time being specified in section 39B(6)(c).

(2)In subsection (1), “the Minister” means—

(a)the Secretary of State, in relation to an order applying to water undertakers whose areas are wholly or mainly in England, and

(b)the Welsh Ministers, in relation to an order applying to water undertakers whose areas are wholly or mainly in Wales.

(3)A statutory instrument containing an order made by the Secretary of State under subsection (1) is subject to annulment in pursuance of a resolution of either House of Parliament.

(4)A statutory instrument containing an order made by the Welsh Ministers under subsection (1) is subject to annulment in pursuance of a resolution of the Assembly.

(5)Subsection (6) applies in relation to a statutory instrument containing both—

(a)an order made by the Secretary of State under subsection (1), and

(b)an order made by the Welsh Ministers under subsection (1).

(6)If in accordance with subsection (3) or (4) (negative resolution procedure)—

(a)either House of Parliament resolves that an address be presented to Her Majesty praying that an instrument containing an order made by the Secretary of State be annulled, or

(b)the Assembly resolves that an instrument containing an order made by the Welsh Ministers be annulled,

the instrument is to have no further effect and Her Majesty may by Order in Council revoke the instrument.]

chapter IIE+W SUPPLY DUTIES

Major suppliesE+W

[F7040Bulk 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).]

[F7040AVariation 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.]

[F7040BCodes in respect of bulk supply agreementsE+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.

40CCodes under section 40B: procedureE+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.

40DCodes under section 40B: minor or urgent revisionsE+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.

40ERules about charges for the supply of water in bulkE+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.

40FRules under section 40E: provision about the reduction of chargesE+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.

40GRules under section 40E: procedureE+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.

40HRules under section 40E: minor or urgent revisionsE+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.

40IRules under section 40E: guidanceE+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.

40JDuty to provide information about bulk suppliesE+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).]

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;

[F71(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 M1New Towns Act 1981—

(i)the [F72new towns residuary body]; and

(ii)F73. . . the development corporation for the new town, F73. . .;

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 M2Local Government, Planning and Land Act 1980, the urban development corporation.

[F74(2A)The duty to provide a water main under this section does not arise in relation to premises in a retail exit area that are not household premises.]

(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.

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—

[F75(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,

[F76may be referred to the Authority for determination under section 30A above by either party to the dispute.]

[F77(7)In this section “relevant deficit” and “discounted aggregate deficit” have the meanings given by sections 43 and 43A below, respectively.]

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 [F78relevant 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 [F79or 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.

[F80(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.

[F81(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 [F82in 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 M3Water Consolidation (Consequential Provisions) Act 1991, a requirement under section 40 of the M4Water Act 1989);

(b)a requirement under the provisions of section 36 or 37 of the M5Water 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.

[F8343ACalculation of “discounted aggregate deficit” for the purposes of section 42E+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.]

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

[F84(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 [F85the 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 [F86the 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 [F87, or (as the case may be) the self-laid main,] to connect with the water main.

[F88(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 F89. . . , 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

[F90(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.]

Domestic connectionsE+W

45 Duty to make connections with main.E+W

(1)Subject to the following provisions of this section and to sections 46 and 47 below, it shall be the duty of a water undertaker (in accordance with section 51 below) to make a connection under this section where the owner or occupier of any premises F91. . .which—

(a)consist in the whole or any part of a building; or

(b)are premises on which any person is proposing to erect any building or part of a building,

serves a notice on the undertaker requiring it, for the purpose of providing a supply of water for domestic purposes to that building or part of a building, to connect a service pipe to those premises with one of the undertaker’s water mains.

[F92(1ZA)The duty to make a connection under this section does not apply in relation to premises in a retail exit area that are not household premises.]

[F93(1A)In relation to service pipes which do not belong to or fall to be laid by the undertaker—

(a)subsection (1) above is subject to section 51D(1) below; and

(b)any such service pipe which is to vest in the undertaker by virtue of an agreement under section 51A below shall be connected to one of the undertaker’s water mains subject to and in accordance with the terms of that agreement.]

(2)Where a notice has been served for the purposes of this section, the duty imposed by subsection (1) above shall be a duty, at the expense of the person serving the notice, to make the connection required by the notice if—

(a)the main with which the service pipe is required to be connected is neither a trunk main nor a water main which is or is to be used solely for the purpose of supplying water otherwise than for domestic purposes; and

(b)such conditions as the undertaker may have imposed under sections 47 to 50 below have been satisfied;

and, subject to section 51 below, that duty shall arise whether or not the service pipe to which the notice relates has been laid when the notice is served.

(3)A notice for the purposes of this section—

(a)shall be accompanied or supplemented by all such information as the undertaker may reasonably require; and

(b)if the notice has effect so that a requirement is imposed on the undertaker by virtue of section 46(4) below, shall set out the matters that have given rise to the imposition of that requirement;

but, subject to section 51(5) below and without prejudice to the effect (if any) of any other contravention of this subsection, a failure to provide information in pursuance of the obligation to supplement such a notice shall not invalidate that notice.

(4)The duty imposed on a water undertaker by this section shall be owed to the person who served the notice by virtue of which the duty arises.

(5)Where a duty is owed by virtue of subsection (4) 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.

(6)Where a water undertaker carries out any works which it is its duty under this section to carry out at another person’s expense, the undertaker shall be entitled to recover from that person an amount equal to the expenses reasonably incurred by the undertaker in carrying out the works.

F94[(6A)Any dispute between a water undertaker and any other person as to whether the expenses were incurred reasonably may be referred to the Director for determination under section 30A above by either party to the dispute.]

(7)Nothing in this section or in sections 46 to 51 below shall impose any duty on a water undertaker to connect a service pipe to any premises with a service pipe to any other premises.

(8)In the following provisions of this Chapter a notice served for the purposes of this section is referred to as a connection notice.

46 Duty to carry out ancillary works for the purpose of making domestic connection.E+W

(1)Where a water undertaker is required to make a connection in pursuance of any connection notice, it shall also be the duty of the undertaker, at the expense of the person serving the notice, to carry out such of the works to which this section applies as need to be carried out before the connection can be made.

(2)This section applies to the laying of so much of the service pipe to be connected with the water main as it is necessary, for the purpose of making that connection, to lay in a street.

(3)In a case where—

(a)the water main with which the service pipe is to be connected is situated in a street;

(b)the premises consisting in the building or part of a building in question together with any land occupied with it abut on the part of the street where the main is situated; and

(c)the service pipe to those premises will—

(i)enter the premises otherwise than through an outer wall of a building abutting on the street; and

(ii)have a stopcock fitted to it by the undertaker in the premises,

this section applies to the laying of so much of the service pipe as it is necessary, for the purpose of making the required connection, to lay in land between the boundary of the street and that stopcock.

(4)In a case where the connection notice is served in compliance with a requirement imposed by a notice by a local authority under section 80 below, this section applies to the laying of so much of the service pipe to be connected with a water main in pursuance of the connection notice as it is necessary, for the purpose of making the connection, to lay in land owned or occupied by a person who is certified by that authority—

(a)to have unreasonably refused his consent to the laying of the service pipe; or

(b)to have sought to make the giving of his consent subject to unreasonable conditions.

(5)Where a water main is alongside a street and within eighteen metres of the middle of that street, subsections (2) to (4) above shall have effect in relation to the laying, for the purpose of making a connection with that main, of a service pipe to any premises as if the street included so much of the land between the main and the boundary of the street as is not comprised in those premises or in any land occupied with those premises.

(6)It shall be the duty of any water undertaker making a connection in pursuance of a connection notice to ensure that a stopcock belonging to the undertaker is fitted to the service pipe which is connected.

(7)Subsections (4) to [F95(6A)] of section 45 above shall have effect-

(a)in relation to any duties which, by virtue of a connection notice, are imposed on a water undertaker by this section; and

(b)in relation to any works which, by virtue of the service of such a notice, such an undertaker carries out under this section at another person’s expense,

as they have effect by virtue of that notice in relation to the duty which arises under that section or, as the case may be, to works which the undertaker carries out under that section at another person’s expense.

(8)Subject to subsection (9) below, a water undertaker may comply with any duty under this section to lay a service pipe by laying a water main instead; but nothing in section 45 above or this section shall impose any duty on a water undertaker to lay a water main where it has no power to lay a service pipe.

(9)Where a water undertaker exercises its power under subsection (8) above to lay a water main instead of a service pipe—

(a)paragraph (a) of section 51(1) below shall have effect as if any additional time reasonably required by reason of the laying of the main instead of the service pipe were included in the time allowed by that paragraph for the laying of the service pipe; but

(b)the expenses recoverable by virtue of section 45(6) and subsection (7) above shall not exceed such amount as it would have been reasonable for the undertaker to have incurred in laying a service pipe instead of the main.

47 Conditions of connection with water main.E+W

(1)Subject to subsection (3) and sections 48 to 50 below, where the owner or occupier of any premises (“the relevant premises”) serves a connection notice on a water undertaker, the undertaker may make compliance with one or more of the requirements specified in subsection (2) below a condition of its complying with the duties to which it is subject by virtue of that notice.

(2)The requirements mentioned in subsection (1) above are—

(a)a requirement that such security as the undertaker may reasonably require has been provided for the discharge of any obligations imposed by virtue of section 45(6) or 46(7)(b) above on the person who served the connection notice;

(b)a requirement, in a case where the connection required by the connection notice is necessary as a consequence of a disconnection made by reason of any person’s failure to pay any charges, that the person serving the connection notice has paid any amount owed by him to the undertaker—

(i)in respect of a supply of water to the relevant premises; or

(ii)in respect of expenses [F96reasonably]incurred in the making of the disconnection;

(c)a requirement that a meter for use in determining the amount of any charges which have been or may be fixed in relation to the relevant premises by reference to volume has been installed and connected either—

(i)by the undertaker; or

(ii)in accordance with specifications approved by the undertaker;

(d)a requirement that—

[F97(i)subject to section 51D(1) below, so much of the service pipe to the relevant premises as does not belong to, vest in or fall to be laid by the undertaker; and]

(ii)the plumbing of the premises,

comply with specifications approved by the undertaker for the purpose of ensuring that it will be reasonably practicable for such a meter as is mentioned in paragraph (c) above to be installed and connected as so mentioned;

(e)a requirement that a separate service pipe has been provided—

(i)to each house or building on the relevant premises; or

(ii)where different parts of a building on the relevant premises are separately occupied, to each of those parts or to any of them;

(f)a requirement, in relation to the relevant premises—

(i)that such a requirement as may be imposed under section 66 below has been complied with; or

(ii)in a case where such a requirement could be imposed but for there already being such a cistern as is mentioned in that section, that the cistern and its float-operated valve are in good repair;

(g)a requirement that there is no contravention in relation to the water fittings used or to be used in connection with—

(i)the supply of water to the relevant premises; or

(ii)the use of water in those premises,

of such of the requirements of regulations under section 74 below as are prescribed for the purposes of this paragraph; and

(h)a requirement that every such step has been taken as has been specified in any notice served on any person under section 75 below in relation to the relevant premises.

F98[(2A)No condition shall be imposed by a water undertaker under subsection (2)(e) above unless it is reasonable to do so in order to ensure that the undertaker will be able to perform its functions, in relation to the supply of water to the relevant premises or any part of those premises, efficiently.]

(3)A condition shall not be imposed by a water undertaker under this section on a person who has served a connection notice except by a counter-notice served on that person before the end of the period of fourteen days beginning with the day after the service of the connection notice.

F99[(3A)Any dispute as to whether any requirement of a kind mentioned in subsection (2)(a), (b), (e) or (f) above has been complied with may be referred to the Director for determination under section 30A above by either party to the dispute.

(3B)Any dispute between a water undertaker and any other person as to whether—

(a)any security required by a condition imposed under subsection (2)(a) above was reasonably required,

(b)the expenses referred to in subsection (2)(b)(ii) above were incurred reasonably, or

(c)in a particular case, subsection (2A) above prevents a water undertaker from imposing a condition under subsection (2)(e) above,

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

(4)This section shall be without prejudice to the provisions of sections 233 and 372 of the M6Insolvency Act 1986 (conditions of supply after insolvency).

48 Interest on sums deposited in pursuance of the deposit condition.E+W

(1)Where for the purposes of subsection (2)(a) of section 47 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.

(2)An approval or determination by the Director for the purposes of this section—

(a)may be given or made in relation to a particular case or description of cases or generally; and

(b)may be revoked at any time.

49 Supplemental provisions with respect to the metering conditions.E+W

(1)The power conferred on a water undertaker to impose conditions under section 47 above for the purposes of metering—

(a)shall be exercisable in relation to any premises even if the undertaker has no immediate intention, when the power is exercised, of fixing charges in relation to those premises by reference to volume; but

(b)shall not be exercisable so as to require the alteration or removal of any pipe laid or plumbing installed before 1st April 1989.

(2)Specifications approved by any water undertaker for the purposes of subsection (2)(c) or (d) of section 47 above may be approved—

(a)in relation to particular premises; or

(b)by being published in such manner as the undertaker considers appropriate, in relation to premises generally or to any description of premises.

F100[(3)Any dispute between a water undertaker and any other person as to the terms of any condition imposed under section 47 above for the purposes of metering shall be referred—

(a)to the arbitration of a single arbitrator appointed by agreement between the undertaker and that person; or

(b)if no agreement is reached, for determination by the Director under section 30A above.]

(4)References in this section to the imposition of a condition under section 47 above for the purposes of metering are references to the imposition of conditions by virtue of subsection (2)(c) or (d) of that section.

50 Restriction on imposition of condition requiring separate service pipes.E+W

(1)This section applies where the effect of a connection notice served in respect of any house is to require a service pipe to that house to be connected with a water main with which it has previously been connected.

(2)Where this section applies, the water undertaker on which the connection notice is served shall not be entitled to make the reconnection subject to any such condition as, apart from this section, may be imposed by virtue of section 47(2)(e) above unless the undertaker would have been entitled under section 64 below to require the provision of a separate service pipe if the reconnection had already been made.

51 Time for performance of connection etc. duties.E+W

(1)A water undertaker shall not be in breach of a duty imposed by virtue of the service of a connection notice unless—

(a)in the case of a duty to lay any service pipe or to connect any service pipe to which such a duty relates, it has failed to lay that pipe or to make that connection as soon as reasonably practicable after the relevant day;

(b)in the case of a duty to connect a service pipe the whole of which has already been laid when the notice is served on the undertaker, it has failed to make the connection before the end of the period of fourteen days beginning with the relevant day.

(2)In any case in which a water undertaker is subject to any such duty as is mentioned in subsection (1)(a) above, it shall be presumed, unless the contrary is shown in relation to that case, that the period of twenty-one days beginning with the relevant day is the period within which it is reasonably practicable for a water undertaker—

(a)to lay so much of any service pipe; and

(b)to fit such stopcock,

as it is necessary to lay or fit in that case for connecting a water main in a street with a service pipe at the boundary of any premises which abut on the part of the street where the main is situated.

(3)Where—

(a)a connection notice is served in respect of any premises; and

(b)at the time when the notice is served, the customer’s part of the service pipe to those premises has not been laid,

the duties of the undertaker under sections 45 and 46 above shall not arise by virtue of that notice until the person serving the notice, having obtained the necessary consents from the owners and occupiers of any affected land, has, at his own expense, laid so much of the service pipe as it is necessary, for the purpose of making the connection, to lay otherwise than in a street or in land mentioned in subsections (3) to (5) of section 46 above.

(4)In subsection (3) above the reference to the customer’s part of the service pipe to any premises is a reference to so much of the service pipe to those premises as falls to be laid otherwise than by the water undertaker in pursuance of section 46 above.

(5)Where—

(a)a person who has served a connection notice on a water undertaker has failed to comply with his obligation under section 45(3)(a) above to supplement that notice with information required by the undertaker; and

(b)that requirement was made by the undertaker at such a time before the end of the period within which the undertaker is required to comply with the duties imposed by virtue of the notice as gave that person a reasonable opportunity to provide the required information within that period,

the undertaker may delay its compliance with those duties until a reasonable time after the required information is provided.

(6)In this section “the relevant day”, in relation to a duty imposed on a water undertaker by virtue of a connection notice, means the day after whichever is the latest of the following days, that is to say-

(a)the day on which the notice was served on the undertaker;

(b)in a case where it is necessary for the person serving the notice to lay any service pipe after serving the notice, the day on which a notice stating that the pipe has been laid is served on the undertaker;

(c)the day on which all such conditions are satisfied as the undertaker has, under sections 47 to 50 above, made conditions of its compliance with that duty.

[F101Adoption of water mains and service pipesE+W

51AAgreements to adopt water main or service pipe at future dateE+W

(1)Subject to subsections (2) and (10) below, a water undertaker may agree with any person constructing or proposing to construct—

(a)any water main; or

(b)any service pipe,

that, if the water main or service pipe is constructed in accordance with the terms of the agreement, the undertaker will, upon completion of the work, at some specified date or on the happening of some future event, declare the water main or (as the case may be) so much of the service pipe as the undertaker could otherwise, by virtue of sections 45 to 51 above, be required to lay, to be vested in that undertaker.

(2)Subsection (1) above shall not apply in the case of water mains or service pipes which are to be used (in whole or in part) for the purpose of supplying water other than for domestic purposes, but—

(a)nothing in this section shall prevent a water undertaker from agreeing apart from this section to declare any such water main or service pipe (or a part of it, as specified in the agreement) to be vested in the undertaker; and

(b)such a declaration shall take effect as a declaration made under this Chapter.

(3)A person constructing or proposing to construct a water main or a service pipe to which subsection (1) above applies may make an application in writing to a water undertaker requesting the undertaker to make an agreement under this section.

(4)An application under subsection (3) above shall be accompanied and supplemented by all such information as the undertaker may reasonably require; but subject to subsection (5) below and without prejudice to the effect (if any) of any other contravention of the requirements of this section in relation to such an application, a failure to provide information in pursuance of the obligation to supplement such an application shall not invalidate the application.

(5)Where—

(a)a person who has made an application to a water undertaker under subsection (3) above has failed to comply with his obligation under this section to supplement that application with information required by the undertaker; and

(b)that requirement was made by the undertaker at such a time before the end of the period within which the undertaker is required, by virtue of section 51B below, to respond to the application as gave that person a reasonable opportunity to provide the required information within that period,

the undertaker may delay its response to the application until a reasonable time after the required information is provided.

(6)In deciding whether or on what terms to grant an application under subsection (3) above, a water undertaker shall have regard in particular to any effect or potential effect on the quality of water supplies and to any increased danger to life or health which it considers may result.

(7)The terms of an agreement under subsection (1) above relating to a water main may, in particular, include terms—

(a)for the provision (at the expense of the person constructing or proposing to construct the water main) by—

(i)that person; or

(ii)the water undertaker,

of such associated infrastructure at or downstream of the point of connection with the undertaker’s supply system as it is necessary to provide in consequence of incorporating the new water main into that system;

(b)providing that, if the water main and the associated infrastructure are constructed in accordance with the terms of the agreement, the undertaker will, in addition to declaring the water main to be vested in it, declare the associated infrastructure to be so vested;

(c)where the undertaker considers that the proposed main is, or is likely to be, needed for the provision of water supply services in addition to those for which the person is proposing to construct the main—

(i)requiring that person to construct the main in a manner differing, as regards material or size of pipes, depth or otherwise, from the manner in which that person proposes, or could otherwise be required by the undertaker, to construct it; and

(ii)providing for the repayment by the undertaker of any extra expense reasonably incurred by that person in complying with that requirement;

(d)for the connection of the new water main to the undertaker’s existing supply system at the point or points specified in the agreement;

(e)for any service pipes which the person constructing or proposing to construct the new water main proposes to connect to that main to be constructed in accordance with the terms of the agreement and, subject to that, to be vested in the undertaker at the same time as the main.

(8)The terms of an agreement under subsection (1) above relating to a service pipe may, in particular, include terms—

(a)for the connection of the new service pipe to the undertaker’s existing supply system at the point or points specified in the agreement;

(b)for such requirements of the kind referred to in section 47(2) above as may be applicable to be complied with before connection takes place.

(9)An agreement made under this section by a water undertaker shall be enforceable against the undertaker by the owner or occupier for the time being of any premises connected or to be connected with the water main or service pipe to which it relates.

(10)A water undertaker shall not make an agreement under this section with respect to a water main or a service pipe situated within the area of another water undertaker, until either—

(a)that other undertaker has consented in writing to the making of the agreement; or

(b)the Secretary of State, on an application made to him, has dispensed with the necessity for such consent, either unconditionally or subject to such conditions as he may think fit to impose.

[F10251BAdoption at a future date: orders by AuthorityE+W

(1)This section applies where a person constructing or proposing to construct a water main or service pipe makes a request to a water undertaker under section 51A(3).

(2)The person or the water undertaker may apply to the Authority for an order under subsection (4) if the person and the water undertaker have not made such agreement as was requested by the person.

(3)The Authority may, on the application of the person or the water undertaker, make an order under subsection (4) if the Authority is satisfied that—

(a)it is appropriate for work proposed to be done by a person other than the water undertaker to be so done, and

(b)the person and the water undertaker cannot reach agreement within a reasonable time.

(4)The Authority may by order—

(a)require the water undertaker to give such undertakings as to the vesting of the water main or service pipe in the undertaker as the Authority may specify, and

(b)impose such terms and conditions as regards taking the benefit of the undertakings as the Authority may specify.

(5)An order under subsection (4) has effect as an agreement under section 51A between the person and the water undertaker.

(6)The Authority may not, by order under subsection (4), require a water undertaker to vest in itself a water main or service pipe as regards which there is a contravention of any of the requirements of section 74 that are prescribed for the purposes of this subsection.

(7)The Authority may not make an order under subsection (4) with respect to a water main or service pipe that is situated within the area of another water undertaker, until either—

(a)that other undertaker has consented in writing to the making of the order, or

(b)the Minister, on an application made to the Minister, has disapplied paragraph (a), either unconditionally or subject to such conditions as the Minister thinks fit.

(8)“The Minister” means—

(a)the Secretary of State, as regards the consent of a water undertaker whose area is wholly or mainly in England;

(b)the Welsh Ministers, as regards the consent of a water undertaker whose area is wholly or mainly in Wales.

(9)Neither the CMA nor the Authority may exercise, in respect of an agreement for the vesting of a water main or service pipe in a water undertaker at a future date, 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).

(10)Subsection (9)(b) does not apply to the exercise of powers in respect of conduct—

(a)which is connected with an agreement for the vesting of a water main or service pipe at a future date, 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.

(11)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 recovery by the water undertaker of the expenses of complying with its obligations by virtue of this section and securing a reasonable return on its capital;

(c)the ability of the water undertaker 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 water undertaker to meet its existing obligations, or likely future obligations, to supply water.]

[F10251CVariation and termination of section 51A agreementsE+W

(1)On the application of a party to a section 51A agreement to vary (or terminate) the agreement, the Authority may—

(a)if it appears to the Authority that it is necessary or expedient that the section 51A agreement should be varied (or terminated),

(b)if the Authority is satisfied, in the case of an application to vary the agreement, that it is appropriate for work proposed to be done by a person other than the water undertaker to be so done, and

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

by order vary (or terminate) the section 51A agreement.

(2)If an order under subsection (1) is made in relation to a section 51A 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.

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

(4)Neither the CMA nor the Authority may exercise, in respect of an agreement to vary or terminate a section 51A 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).

(5)Subsection (4)(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 section 51A 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.

(6)In exercising its functions under this section, the Authority must have regard to the expenses incurred by the water undertaker in complying with its obligations under the section 51A agreement in question and to the desirability of—

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

(b)the recovery by the water undertaker of the expenses of complying with its obligations by virtue of this section and securing a reasonable return on its capital;

(c)the ability of the water undertaker 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 water undertaker to meet its existing obligations, or likely future obligations, to supply water.

(7)In this section and sections 51CA to 51CG “section 51A agreement” means an agreement with a water undertaker for the vesting of a water main or service pipe in a water undertaker at a future date and includes—

(a)an order under section 51B which is deemed to be an agreement by virtue of section 51B(5), and

(b)any agreement which has been varied by order under subsection (1).]

[F10251CACodes in respect of section 51A agreementsE+W

(1)The Authority must issue a code in respect of section 51A agreements.

(2)The code may make provision about—

(a)procedures in connection with making an agreement under section 51A;

(b)procedures in connection with varying or terminating a section 51A agreement;

(c)procedures to be followed by the Authority in determining whether to make an order under section 51B(4) or 51C(1);

(d)the circumstances in which it is, or is not, appropriate for work to be done by a person other than a water undertaker;

(e)the terms and conditions of a section 51A agreement;

(f)principles for determining the terms and conditions that should or should not be incorporated into a section 51A agreement;

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

(3)Provision under subsection (2)(c) may in particular require the Authority to consult—

(a)the Chief Inspector of Drinking Water;

(b)the Chief Inspector of Drinking Water for Wales if there is one.

(4)Provision under subsection (2)(d) may include in particular provision about circumstances relating to—

(a)the nature of the work;

(b)the kind of premises supplied or to be supplied.

(5)Provision under subsection (2)(e) may include in particular provision about terms and conditions as regards—

(a)constructing associated infrastructure;

(b)vesting associated infrastructure in a water undertaker;

(c)constructing water mains so as to meet additional supply requirements;

(d)connecting new water mains or service pipes to the existing supply system of a water undertaker;

(e)complying with requirements of the kind referred to in section 47(2);

(f)the duration of a section 51A agreement.

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

(7)The Authority may not give a direction under subsection (6) requiring a person to enter into, vary or terminate an agreement.

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

(9)The code may make different provision for different persons or descriptions of person.

(10)The Authority must from time to time review the code and, if appropriate, issue a revised code.

(11)A revised code may include provision for applying any of its revisions to section 51A agreements made before the revised code comes into force.

51CBCodes under section 51CA: procedureE+W

(1)Before issuing a code under section 51CA, the Authority must—

(a)prepare a draft of the proposed code under section 51CA, and

(b)consult the relevant persons about the proposed code.

(2)The relevant persons are—

(a)the Chief Inspector of Drinking Water;

(b)the Chief Inspector of Drinking Water for Wales if there is one;

(c)such other persons as the Authority considers appropriate.

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

(4)Before a code under section 51CA 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.

(5)Subsection (4) is subject to subsections (7) and (8).

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

(a)the Secretary of State, so far as the code relates to section 51A agreements for the vesting of water mains or service pipes in water undertakers whose areas are wholly or mainly in England;

(b)the Welsh Ministers, so far as the code relates to section 51A agreements for the vesting of water mains or service pipes in water undertakers whose areas are wholly or mainly in Wales.

(7)The power under subsection (4) may not be exercised more than once by the Secretary of State or the Welsh Ministers.

(8)If the power under subsection (4) is not exercised by the Secretary of State or the Welsh Ministers on the first occasion on which it may be exercised by the Secretary of State or (as the case may be) the Welsh Ministers, it may not be exercised by the Secretary of State or (as the case may be) the Welsh Ministers on a later occasion.

(9)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 a code in relation to which a direction may be given may not be issued before that period of 28 days has expired.

(10)This section is subject to section 51CC.

51CCCodes under section 51CA: minor or urgent revisionsE+W

(1)This section applies if the Authority proposes to issue a revised code under section 51CA 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 51CB 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.

51CDRules about charges in connection with a section 51A agreementE+W

(1)The Authority may issue rules about charges that may be imposed by a water undertaker under a section 51A 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)The rules may require a water undertaker, upon declaring a water main or service pipe to be vested in the undertaker in accordance with a section 51A agreement, to pay to the other party to the agreement an amount (which may be nil) determined in accordance with the rules.

(4)Rules made by virtue of subsection (3) may, in particular, provide for the determination to take into account—

(a)revenue that might be derived from the water main or service pipe in question;

(b)costs that might have been incurred in providing such a water main or service pipe.

(5)The rules may also make provision as to—

(a)the amount of security that may be required by a water undertaker for the purposes of any charges imposed by the water undertaker under a section 51A agreement;

(b)the type of security that may be required;

(c)the payment of interest on a sum deposited with a water undertaker by way of security.

(6)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.

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

(8)The rules may make different provision for different water undertakers or descriptions of undertaker.

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

(10)The Authority must issue revised rules if—

(a)guidance is issued under section 51CG, and

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

(11)Revised rules may include provision for applying any of their revisions to section 51A agreements made before the revised rules come into effect.

51CERules under section 51CD: procedureE+W

(1)Before issuing rules under section 51CD, the Authority must—

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

(b)consult the relevant persons about the draft.

(2)The relevant persons are—

(a)the Secretary of State;

(b)the Welsh Ministers;

(c)the Council;

(d)any water undertakers or other persons likely to be affected by the rules;

(e)such other persons as the Authority thinks appropriate.

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

(4)The Authority must have regard to guidance issued under section 51CG in making rules under section 51CD.

(5)Before rules under section 51CD prepared by the Authority are issued, the Minister may direct the Authority not to issue the rules.