Water Bill (HC Bill 82)

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(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
5section 18.

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

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

(11) 10A revised code may include provision for applying any of its revisions
to section 51A agreements made before the revised code comes into
force.

51CB Codes under section 51CA: procedure

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

(a) 15prepare 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) 20such 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,
25the 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) 30the 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
35agreements 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
40State 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.

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(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) 5This section is subject to section 51CC.

51CC Codes under section 51CA: minor or urgent revisions

(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) 10a 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
15soon 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) 20Notice 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
25beginning with the day after that on which the revised code is issued.

51CD Rules about charges in connection with a section 51A agreement

(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 specify—

(a) 30what 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
35be imposed;

(d) principles for determining the amount of any charge 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
40undertaker 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.

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(5) A code may make different provision for different water undertakers or
descriptions of undertaker.

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

(7) 5Revised rules may include provision for applying any of their revisions
to section 51A agreements made before the revised rules come into
effect.

51CE Rules under section 51CD: procedure

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

(a) 10prepare a draft of any 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) 15the 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 have regard to guidance issued under section 51CF
20in making rules under section 51CD.

51CF Rules under section 51CD: guidance

(1) The Minister may issue guidance as to the content of rules under
section 51CD.

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

(a) 25prepare 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) 30such 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) 35The 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 water undertakers whose
areas are wholly or mainly in England;

(b) 40the Welsh Ministers, in relation to water undertakers whose
areas are wholly or mainly in Wales.

(4) In section 51E (sections 51A to 51D: supplementary), in subsection (2), for “In
sections 51A to 51C above” there is substituted “In section 51A”.

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11 Agreements by sewerage undertakers to adopt infrastructure

(1) The Water Industry Act 1991 is amended as follows.

(2) In section 104 (agreements to adopt a sewer, drain or sewage disposal works at
a future date)—

(a) 5in subsection (2) (application to make an agreement under section 104),
for the words from “make an application” to the end there is substituted
“request a sewerage undertaker to make an agreement under this
section.”;

(b) subsections (3), (4) and (6A) are repealed;

(c) 10after subsection (5) there is inserted—

(5A) The reference in subsection (5) to an agreement made under this
section includes a reference to—

(a) an order under section 105ZA which is deemed to be an
agreement by virtue of section 105ZA(5), and

(b) 15any agreement which has been varied by order under
section 105ZB(1).

(3) After section 105 there is inserted—

105ZA Adoption at a future date: orders by Authority

(1) This section applies where a person mentioned in section 104(1)(a) or
20(b) makes a request to a sewerage undertaker under section 104(2).

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

(3) 25The Authority may, on the application of the person or the sewerage
undertaker, make an order under subsection (4) if the Authority is
satisfied that—

(a) where the person is such person as is mentioned in section
104(1)(a), it is appropriate for work proposed to be done by a
30person other than the sewerage undertaker to be so done, and

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

(4) The Authority may by order—

(a) require the sewerage undertaker to give such undertakings as
35to the vesting of the sewer, such part of the drain as constitutes
the lateral drain or the works 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) 40An order under subsection (4) has effect as an agreement under section
104 between the person and the sewerage undertaker.

(6) The Authority may not make an order under subsection (4) with
respect to—

(a) a sewer, drain or sewage disposal works situated in the area of
45another undertaker, or

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(b) a drain which is intended to communicate with a sewer
which—

(i) is so situated, or

(ii) is vested in another sewerage undertaker,

5until one of the conditions mentioned in subsection (7) is
satisfied.

(7) The conditions are that—

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

(b) 10the 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, in relation to a sewerage undertaker
15whose area is wholly or mainly in England;

(b) the Welsh Ministers, in relation to a sewerage 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 sewer, drain or sewage disposal works
20in a sewerage undertaker at a future date or on a future event, 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) 25Subsection (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
sewer, drain or sewage disposal works in a sewerage
undertaker at a future date or on a future event, and

(b) 30in 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
35regard to the desirability of—

(a) facilitating effective competition within the sewerage services
industry;

(b) the recovery by the sewerage undertaker of the expenses of
complying with its obligations by virtue of this section and
40securing a reasonable return on its capital;

(c) the ability of the sewerage undertaker to meet its existing
obligations, and likely future obligations, to provide sewerage
services without having to incur unreasonable expenditure in
carrying out works;

(d) 45not putting at risk the ability of the sewerage undertaker to
meet its existing obligations, or likely future obligations, to
provide sewerage services.

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105ZB Variation and termination of section 104 agreements

(1) On the application of a party to a section 104 agreement to vary (or
terminate) the agreement, the Authority may—

(a) if it appears to the Authority that it is necessary or expedient
5that the section 104 agreement should be varied (or terminated),

(b) if the Authority is satisfied, in the case of an application to vary
the agreement involving such person as is mentioned in section
104(1)(a), that it is appropriate for work proposed to be done by
a person other than the sewerage undertaker to be so done, and

(c) 10if the Authority is satisfied that variation (or termination)
cannot be achieved by agreement within a reasonable time,

by order vary (or terminate) the section 104 agreement.

(2) If an order under subsection (1) is made in relation to a section 104
agreement, the agreement—

(a) 15has 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
20agreement to vary or terminate a section 104 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) 25Subsection (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 104 agreement, and

(b) in respect of which section 35(1) of the Competition Act 1998
30applies 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 sewerage undertaker in
35complying with its obligations under the section 104 agreement in
question and to the desirability of—

(a) facilitating effective competition within the sewerage services
industry;

(b) the recovery by the sewerage undertaker of the expenses of
40complying with its obligations by virtue of this section and
securing a reasonable return on its capital;

(c) the ability of the sewerage undertaker to meet its existing
obligations, and likely future obligations, to provide sewerage
services without having to incur unreasonable expenditure in
45carrying out works;

(d) not putting at risk the ability of the sewerage undertaker to
meet its existing obligations, or likely future obligations, to
provide sewerage services.

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(7) In this section and sections 105ZC to 105ZH “section 104 agreement”
means an agreement with a sewerage undertaker for the vesting of a
sewer, drain or sewage disposal works in a sewerage undertaker at a
future date or on a future event and includes—

(a) 5an order under section 105ZA which is deemed to be an
agreement by virtue of section 105ZA(5), and

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

105ZC Codes in respect of section 104 agreements

(1) 10The Authority may issue one or more codes in respect of section 104
agreements.

(2) A code may make provision about—

(a) procedures in connection with making an agreement under
section 104;

(b) 15procedures in connection with varying or terminating a section
104 agreement;

(c) procedures to be followed by the Authority in determining
whether to make an order under section 105ZA(4) or 105ZB(1);

(d) the circumstances in which it is, or is not, appropriate for work
20to be done by a person other than a sewerage undertaker;

(e) the terms and conditions of a section 104 agreement;

(f) principles for determining the terms and conditions that should
or should not be incorporated into a section 104 agreement;

(g) the steps to be taken by the Authority in determining whether a
25person is complying with a code.

(3) 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.

(4) 30Provision 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 sewerage undertaker;

(c) making a communication with public sewers.

(5) 35If the Authority considers that a sewerage 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.

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

(7) 40It is the duty of a sewerage undertaker to comply with a direction under
subsection (5), and this duty is enforceable by the Authority under
section 18.

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

(9) 45The Authority may from time to time review a code issued under this
section and issue a revised code.

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(10) A revised code may include provision for applying any of its revisions
to section 104 agreements made before the revised code comes into
force.

105ZD Codes under section 105ZC: procedure

(1) 5Before issuing a code under section 105ZC, the Authority must—

(a) prepare a draft of the proposed code under section 105ZC, and

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

(2) The Authority must specify the period (“the consultation period”)
10within which a person may make representations about the proposed
code.

(3) Before a code under section 105ZC prepared by the Authority is issued,
the Minister may direct the Authority—

(a) not to issue the code, or

(b) 15to 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, in relation to sewerage undertakers
whose areas are wholly or mainly in England;

(b) 20the Welsh Ministers, in relation to sewerage undertakers whose
areas are wholly or mainly in Wales.

(6) The power under subsection (3) may not be exercised more than once
by the Secretary of State or the Welsh Ministers.

(7) If the power under subsection (3) is not exercised by the Secretary of
25State 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.

(8) A direction under subsection (3) must be given within the period of 28
30days 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.

(9) This section is subject to section 105ZE.

105ZE Codes under section 105ZC: minor or urgent revisions

(1) 35This section applies if the Authority proposes to issue a revised code
under section 105ZC 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
40delay.

(2) Section 105ZD 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

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(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
5Authority 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.

105ZF 10 Rules about charges in connection with a section 104 agreement

(1) The Authority may issue rules about charges that may be imposed by a
sewerage undertaker under a section 104 agreement.

(2) The rules may in particular specify—

(a) what types of charge may be imposed;

(b) 15the 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) 20principles for determining the amount of any charge that may
be imposed.

(3) If the Authority considers that a sewerage 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
25the direction.

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

(5) A code may make different provision for different sewerage
30undertakers or descriptions of undertaker.

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

(7) Revised rules may include provision for applying any of their revisions
to section 104 agreements made before the revised rules come into
35effect.

105ZG Rules under section 105ZF: procedure

(1) Before issuing rules under section 105ZF, the Authority must—

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

(b) consult the relevant persons about the draft.

(2) 40The relevant persons are—

(a) the Secretary of State;

(b) the Welsh Ministers;

(c) the Council;

(d) any sewerage undertakers or other persons likely to be affected
45by the rules;

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

(3) The Authority must have regard to guidance issued under section
105ZH in making rules under section 105ZF.

105ZH Rules under section 105ZF: guidance

(1) 5The Minister may issue guidance as to the content of rules under
section 105ZF.

(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) 10The 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
15revised 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) 20In this section “the Minister” means—

(a) the Secretary of State, in relation to sewerage undertakers
whose areas are wholly or mainly in England;

(b) the Welsh Ministers, in relation to sewerage undertakers whose
areas are wholly or mainly in Wales.

(4) 25In section 107 (right of sewerage undertaker to undertake the making of
communications with public sewers), after subsection (1) there is inserted—

(1A) A sewerage undertaker may not give notice to a person under
subsection (1) if—

(a) the undertaker and the person entered into an agreement under
30section 104, and

(b) the agreement provides for the communication to which the
person’s proposal relates to be made by the person.

(5) In section 108 (communication works by person entitled to communication), in
subsection (1), after “section 106 above” there is inserted “or may not make
35such an election because of section 107(1A)”.