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Water Industry Act 1991

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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 [F1relevant 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 [F2or 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.

[F3(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.

[F4(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 [F5in 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 M1Water Consolidation (Consequential Provisions) Act 1991, a requirement under section 40 of the M2Water Act 1989);

(b)a requirement under the provisions of section 36 or 37 of the M3Water 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.

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