PART II continued CHAPTER I continued
(5) In relation to a merger of two or more water enterprises—
(a) the value of the assets taken over shall, for the purposes of subsection (3) above, be determined in accordance with section 67 of the Fair Trading Act 1973 by reference only to assets employed in or appropriated to a water enterprise; and
(b) the value of the assets of a water enterprise belonging to the person making the take over shall be taken for those purposes to be the value of such assets employed in or appropriated to that enterprise as by virtue of the exceptions in paragraph (a) of subsection (2) of that section are disregarded in determining the value of the assets taken over;
and paragraph (b) of that subsection shall apply for determining the value of the assets referred to in paragraph (b) above as it applies in relation to the assets taken over.
(6) For the purposes of subsections (3) and (5) above and of any determination in accordance with those subsections—
(a) the assets treated as employed in or appropriated to a water enterprise carried on by a company holding an appointment under this Chapter, a statutory water company within the meaning of the 1973 Act or a water authority shall include all the assets for the time being of that company or authority;
(b) every water enterprise any of whose assets fall to be disregarded as mentioned in subsection (5)(b) above shall be treated as belonging to the person making the take over;
(c) the enterprises mentioned in paragraph (b) above shall be treated as separate enterprises in so far as they are carried on by different companies holding appointments under this Chapter or, in relation to any time before the transfer date, by different statutory water companies; and
(d) subsections (3) and (4) of section 67 of the [1973 c. 41.] Fair Trading Act 1973 (assets treated as appropriated to an enterprise and mergers over a period) shall apply as they apply for the purposes of, and of any determination in accordance with, subsection (2) of that section.
(7) The Secretary of State shall not make a reference under this section in relation to the merger of any two or more enterprises, or in relation to any arrangements which will or may result in such a merger, if—
(a) the merger of those enterprises has been; or
(b) arrangements that might result in the merger of those enterprises have been,
the subject of a merger reference made before the passing of this Act under Part V of the Fair Trading Act 1973.
(8) Nothing in this section shall prejudice any power of the Secretary of State, in a case in which he is not required to make a reference under this section, to make a merger reference under Part V of the Fair Trading Act 1973 in respect of any actual or prospective merger of two or more water enterprises.
(9) In this section and section 30 below—
(a) “enterprise” has the meaning given for the purposes of sections 64 to 77 of the Fair Trading Act 1973 by section 63(2) of that Act; and
(b) references, in relation to any two or more enterprises, to the merger of those enterprises are references to those enterprises ceasing, within the meaning of Part V of that Act, to be distinct enterprises;
and sections 66 and 66A of that Act (time at which enterprises cease to be distinct) shall have effect for the purposes of this section and section 30 below as they have effect for the purposes of that Part.
(10) If the Secretary of State considers that it is appropriate for subsection (3) above to have effect with a reference in paragraph (b) to a different amount, or for the condition set out in that paragraph to be modified in any other respect, he may, in relation to mergers after the coming into force of the regulations, by regulations make such modifications of that paragraph and, for that purpose, of the other provisions of this section as may be prescribed.
(1) Subject to subsections (2) to (5) below, the [1973 c. 41.] Fair Trading Act 1973 shall have the effect in relation to any reference under section 29 above as if—
(a) any such merger of two or more water enterprises as is required to be the subject of such a reference were a merger situation qualifying for investigation; and
(b) a reference under that section were made under section 64 of that Act or, as the case may be, under section 75 of that Act (references in anticipation of a merger).
(2) Nothing in subsection (1) above shall have the effect in relation to any reference under section 29 above of applying—
(a) so much of Part V of the Fair Trading Act 1973 as requires the Monopolies Commission to consider any of the matters set out in subsection (1) of section 64 of that Act; or
(b) the provisions of sections 69(2) to (4) and 75(3) of that Act (power to restrict matters referred).
(3) In determining on a reference under section 29 above whether any matter operates, or may be expected to operate, against the public interest the Monopolies Commission—
(a) shall have regard to the desirability of giving effect to the principle that the number of water enterprises which are under independent control should not be reduced so as to prejudice the Director’s ability, in carrying out his functions by virtue of this Act, to make comparisons between different such water enterprises; and
(b) shall have regard to the desirability of achieving any other purpose so far only as they are satisfied—
(i) that that other purpose can be achieved in a manner that does not conflict with that principle; or
(ii) that the achievement of that other purpose is of substantially greater significance in relation to the public interest than that principle and cannot be brought about except in a manner that conflicts with that principle.
(4) No order shall be made under Part V of the Fair Trading Act 1973 in consequence of any merger reference made under section 29 above in respect of an actual merger unless the reference was made within the appropriate time limit; and if on such a reference the Monopolies Commission are satisfied that the reference was not made within that time limit their report on the reference shall state that fact and nothing else.
(5) For the purposes of subsection (4) above the appropriate time limit is—
(a) in the case of a reference in respect of a merger which took place before the passing of this Act, the period of six months beginning with the day on which this Act is passed; and
(b) in any other case of a merger which has taken place before the reference, the period of six months beginning with whichever is the later of—
(i) the day on which the merger took place; and
(ii) the day on which the material facts about the transactions which resulted in the merger first came to the notice of the Secretary of State or the Director General of Fair Trading or were made public within the meaning of section 64 of the [1973 c. 41.] Fair Trading Act 1973.
(6) In this section “water enterprise” has the same meaning as in section 29 above; and the reference to the number of water enterprises under independent control is a reference to the number of water enterprises there would be if two or more water enterprises counted as one enterprise wherever they would be treated for the purposes of Part V of the Fair Trading Act 1973 as having ceased to be distinct enterprises.
(1) The Director shall, at such premises and in such form as he may determine, maintain a register for the purposes of this Chapter.
(2) Subject to any direction given under subsection (3) below, the Director shall cause to be entered in the register the provisions of—
(a) every appointment under this Chapter, every termination or transfer of any such appointment, every variation of the area for which any company holds any such appointment and every modification of the conditions of any such appointment;
(b) every direction, consent or determination given or made under any such appointment by the Secretary of State, the Monopolies Commission or the Director himself;
(c) every final order made under section 20 above, every provisional order made or confirmed under that section, every revocation of such a final or provisional order and every notice under subsection (6) of that section;
(d) every undertaking given to and accepted by the Secretary of State or the Director for the purposes of subsection (5)(b) of that section; and
(e) every special administration order and every discharge of such an order.
(3) If it appears to the Secretary of State that the entry of any provision in the register would be against the public interest, he may direct the Director not to enter that provision in the register; and the Director shall comply with any such direction.
(4) The contents of the register shall be available for inspection by the public at such times and subject to the payment of such charges as may be specified in an order made by the Secretary of State.
(5) Any person may, on the payment of such fee as may be specified in an order so made, require the Director to supply him with a copy of, or extract from, the contents of any part of the register, being a copy or extract which is certified by the Director to be a true copy or extract.
(6) The power to make an order under subsection (4) or (5) above shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament.
(7) Any sums received by the Director under this section shall be paid into the Consolidated Fund.
(8) In this section “special administration order” means an order under section 23 above (whether made by virtue of that section or section 24 above).
(1) It shall be the duty of a company holding an appointment under this Chapter and, in relation to any time before the transfer date, of any statutory water company within the meaning of the 1973 Act to furnish the Secretary of State with all such information relating to any matter which—
(a) is connected with, or with any proposals relating to, the carrying out by that company of the functions of a water undertaker or sewerage undertaker; or
(b) is material to the carrying out by the Secretary of State of any of his functions under this Act,
as the Secretary of State may reasonably require.
(2) Information required under this section shall be furnished in such form and manner, and be accompanied or supplemented by such explanations, as the Secretary of State may reasonably require.
(3) The information which a company may be required to furnish to the Secretary of State under this section shall include information which, although it is not in the possession of that company or would not otherwise come into the possession of that company, is information which it is reasonable to require that company to obtain.
(4) A requirement for the purposes of this section shall be contained in a direction which—
(a) may describe the information to be furnished in such manner as the Secretary of State considers appropriate;
(b) may require the information to be furnished on a particular occasion, in particular circumstances or from time to time; and
(c) may be given to a particular company, to companies of a particular description or to all the companies holding appointments under this Chapter.
(5) The obligations of a water undertaker or sewerage undertaker under this section shall be enforceable under section 20 above by the Secretary of State.
(1) Where it appears to the Secretary of State or the Director that a company which holds an appointment under this Chapter may be contravening, or may have contravened—
(a) any condition of its appointment; or
(b) any statutory or other requirement enforceable under section 20 above,
he may, for any purpose connected with such of his powers under sections 20 to 23 above as are exercisable in relation to that matter, serve a notice under subsection (2) below on any person.
(2) A notice under this subsection is a notice signed by the Secretary of State or the Director and—
(a) requiring the person on whom it is served to produce, at a time and place specified in the notice, to the Secretary of State or the Director or to any person appointed by the Secretary of State or the Director for the purpose, any documents which are specified or described in the notice and are in that person’s custody or under his control; or
(b) requiring that person, if he is carrying on a business, to furnish, at the time and place and in the form and manner specified in the notice, the Secretary of State or the Director with such information as may be specified or described in the notice.
(3) No person shall be required under this section to produce any documents which he could not be compelled to produce in civil proceedings in the High Court or, in complying with any requirement for the furnishing of information, to give any information which he could not be compelled to give in evidence in any such proceedings.
(4) A person who, without reasonable excuse, fails to do anything required of him by a notice under subsection (2) above shall be guilty of an offence and liable, on summary conviction, to a fine not exceeding level 5 on the standard scale.
(5) A person who intentionally alters, suppresses or destroys any document which he has been required by any notice under subsection (2) above to produce shall be guilty of an offence and liable—
(a) on summary conviction, to a fine not exceeding the statutory maximum;
(b) on conviction on indictment, to a fine.
(6) If a person makes default in complying with a notice under subsection (2) above, the High Court may, on the application of the Secretary of State or the Director, make such order as the Court thinks fit for requiring the default to be made good; and any such order may provide that all the costs or expenses of and incidental to the application shall be borne by the person in default or by any officers of a company or other association who are responsible for its default.
(7) Nothing in this section shall be construed as restricting any power of the Secretary of State or the Director under section 32 above or the conditions of an appointment under this Chapter to require a company holding such an appointment to produce any document to him or to furnish him with any information.
(1) The Secretary of State may arrange for the publication, in such form and in such manner as he considers appropriate, of such information relating to any matter which is connected with the carrying out by a company holding an appointment under this Chapter of the functions of a water undertaker or sewerage undertaker as it may appear to him to be in the public interest to publish.
(2) The Director may arrange for the publication, in such form and in such manner as he considers appropriate, of such information and advice as it may appear to him to be expedient to give to any customer or potential customer of a company holding an appointment under this Chapter.
(3) In arranging for the publication of any such information or advice the Secretary of State or the Director shall have regard to the need for excluding, so far as that is practicable—
(a) any matter which relates to the affairs of an individual, where the publication of that matter would or might, in the opinion of the Secretary of State or (as the case may be) 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 Secretary of State or (as the case may be) of the Director, seriously and prejudicially affect the interests of that body.
(1) The Director shall, as soon as practicable after the end of the year 1989 and of each subsequent calendar year make to the Secretary of State a report on—
(a) his activities during that year; and
(b) the Monopolies Commission’s activities during that year so far as relating to references made by him.
(2) Every such report shall—
(a) include a general survey of developments, during the year to which it relates, in respect of matters falling within the scope of the Director’s functions; and
(b) set out any general directions given to the Director during that year under section 26(3) above.
(3) The Secretary of State shall lay a copy of every report made by the Director under subsection (1) above before each House of parliament and shall arrange for copies of every such report to be published in such manner as he considers appropriate.
(4) The Director may also prepare such other reports as appear to him to be expedient with respect to any matters falling within the scope of his functions.
(5) The Director may arrange for copies of any report prepared under subsection (4) above to be published in such manner as he considers appropriate.
(6) In making or preparing any report under this section the Director shall have regard to the need for excluding, so far as that is practicable, the matters specified in section 34(3)(a) and (b) above.
(1) A customer service committee—
(a) shall prepare a report on any such matter as the Director may require; and
(b) may prepare a report concerning any matter which appears to the customer service committee to affect the interests of the customers or potential customers of a company allocated to the committee,
and, as soon as reasonably practicable after preparing a report under this subsection, a customer service committee shall send a copy of the report to the Director.
(2) As soon as reasonably practicable after the end of each financial year, a customer service committee shall prepare a report on its activities during that year and shall send a copy of that report to the Director.
(3) The Director may arrange for any report which has been sent to him by virtue of this section to be published in such manner as he considers appropriate.
(4) In publishing any report under this section the Director shall have regard to the need for excluding, so far as that is practicable, the matters specified in section 34(3)(a) and (b) above.
(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 Chapter.
(2) The duty of water undertaker under this section shall be enforceable under section 20 above by the Secretary of State or, with the consent of or in accordance with a general authorisation given by the Secretary of State, by the Director.
(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 Chapter 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 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 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; and such regulations 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.
(3) 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.
(4) Subject to subsection (5) below, the Secretary of State shall not make any regulations under subsection (1) or (2) above unless—
(a) the Director has made a written application to the Secretary of State which—
(i) sets out draft provisions proposed by the Director for inclusion in such regulations;
(ii) specifies the water undertaker or undertakers in relation to which it is proposed those provisions should apply; and
(iii) summaries the Director’s reasons for his proposals;
(b) the Secretary of State is satisfied that a copy of the application has been served by the Director on every water undertaker specified in the application;
(c) the regulations contain only the provisions proposed by the Director or those provisions with such modifications as the Secretary of State considers appropriate;
(d) the only modifications of the Director’s proposals to which effect is given by the regulations are modifications the proposal to make which has been notified to the Director and to any water undertaker appearing to the Secretary of State to be likely to be affected by the modifications;
(e) such period as the Secretary of State considers appropriate has been allocated for the making by the Director and by any affected water undertaker of representations or objections with respect to the Director’s proposals and any modifications proposed by the Secretary of State; and
(f) the Secretary of State has considered both 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.
(5) Subsection (4) above shall not apply in relation to any regulations made under subsection (2) above before the transfer date.
(6) The obligations imposed on a water undertaker by the following provisions of this Chapter 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 37 above and shall not be in any way qualified by any such provision.
(1) Where, on the application of a water undertaker—
(a) it appears to the Director that it is necessary or expedient for the purposes of this Chapter that another water undertaker should give a supply of water in bulk to the applicant; and
(b) he is satisfied that the giving and taking of such a supply cannot be secured by agreement,
the Director may by order require the undertakers to give and to take such a supply for such period and on such terms and conditions as may be provided in the order.
(2) An order under this section shall have effect as an agreement between the water undertakers in question but may be varied or revoked by a subsequent order made by the Director on the application of either of those undertakers, as well as by agreement between the undertakers.
(3) The Director shall not make an order under this section which he considers affects the carrying out by the Authority of any of its functions unless he has first consulted the Authority.
(4) In determining what provision to make by an order under this section in respect of the giving of any supply by a water undertaker the Director shall have regard to the desirability of the undertaker’s recovering the expenses of complying with its obligations under this section and of securing a reasonable return on its capital.
(1) It shall be the duty of a water undertaker 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 41 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;
(d) where the whole or any part of that locality is situated in a new town, within the meaning of the [1981 c. 64.] New Towns Act 1981—
(i) the Commission for the New Towns; and
(ii) the Development Board for Rural Wales or the development corporation for the new town, according to whether or not the new town is situated within the area for which that Board is for the time being responsible;
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 [1980 c. 65.] Local Government, Planning and Land Act 1980, the urban development corporation.
(3) A water undertaker shall not be in breach of a duty imposed by this section in relation to any locality unless—
(a) the period of three months beginning with the relevant day has expired; and
(b) the water undertaker has not, before the end of that period, so laid the water main to be provided as to enable service pipes to premises in that locality to connect with the main at the places determined under subsection (4) below;
and for the purposes of this subsection the period mentioned in paragraph (a) above may be extended by agreement between the undertaker and the person or persons who required the provision of the water main or, where there is a dispute as to whether the period should be extended, by an arbitrator on a reference under subsection (5) below.
(4) The places mentioned in subsection (3)(b) above shall be determined by agreement between the water undertaker and the person or persons who required the provision of the water main or, in default of agreement, shall be such places as are determined by an arbitrator, on a reference under subsection (5) below, to be the places at which it is reasonable, in all the circumstances, for service pipes to premises in the locality in question to connect with the water main.
(5) A reference for the purposes of subsection (3) or (4) above shall be to a single arbitrator appointed by agreement between the undertaker and the person or persons who required the provision of the water main or, in default of agreement, by the President of the Institution of Civil Engineers.
(6) 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; and any breach by a water undertaker of any such duty which causes any person to whom the duty is owed to sustain loss or damage shall be actionable at the suit of that person.
(7) In any proceedings brought against a water undertaker in pursuance of subsection (6) above in respect of a breach of duty which has caused any person to sustain loss or damage 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.
(8) 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;
“relevant day”, in relation to a requirement to provide a water main for any locality, means the day after whichever is the later of the following, that is to say—
the day on which the conditions specified in section 41 below are satisfied in relation to the requirement; and
the day on which the places where service pipes to premises in that locality will connect with the main are determined under subsection (4) above.
(1) The conditions mentioned in section 40(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—
(i) by virtue of section 40(2)(a) or (b) above required, or joined in requiring, the provision of the main; and
(ii) is not a public authority.
(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 bind the person or persons mentioned in that subsection (in the case of two or more persons, either jointly and severally or with liability to pay apportioned in such manner as those persons may agree) to pay to the undertaker, in respect of each of the twelve years following the provision of the main, an amount not exceeding the relevant deficit (if any) for that year on that main.
(3) For the purposes of this section the relevant deficit for any year on a water main is the amount (if any) by which the water charges payable for the use during that year of that main are exceeded by the annual borrowing costs of a loan of the amount required for the provision of that main.
(4) 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 either by the undertaker with the approval of the Director or, in default of such a determination, by the Director.
(5) 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 any such additional capacity in an earlier water main as falls to be used in consequence of the provision of the new main;
and in this subsection “earlier water main”, in relation to the new main, means any water main which has been provided in the period of twelve years immediately before the provision of the new main and was so provided in pursuance of a requirement under section 40 above, under the provisions of section 36 or 37 of the 1945 Act or of section 29 of Schedule 3 to that Act (water main requisitions) or under any local statutory provision corresponding to section 40 above or to any of those provisions of the 1945 Act.
(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.
(7) For the purposes of this section references to the water charges payable for the use during any year of any main provided by a water undertaker are references to so much of the aggregate of any charges payable to the water undertaker in respect of services provided in the course of that year as represents charges which—
(a) have been imposed by the undertaker in relation to premises which are connected with that main; and
(b) 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.