Chapter 9: Highway undertakings
Overview
1148.This Chapter makes special provision for highway undertakings and highway concessions.
1149.Section 341 provides that carrying on a highway undertaking is always an “undertaking carried on by way of trade” for the purposes of Part 3. It gives “highway undertaking” the same meaning as in section 274(1) and defines “highway concession”.
1150.Section 342 provides that a highway concession is not an interest in the road but can be treated as the relevant interest in relation to expenditure on the road if the person incurring the expenditure was not entitled to an interest in the road.
1151.Section 343 provides a balancing event if the relevant interest is a highway concession which comes to an end and is not treated as extended. It also defines “proceeds” from that event.
1152.Section 344 provides for a concession to be treated as extended if the person entitled to the concession or a connected person takes up a renewed or new concession in the whole or part of the road.
Section 341: Carrying on of highway undertakings
1153.This section is based on section 21(5AA), (5A) and (5B) of CAA 1990. It sets out the special rules that are to apply in Part 3 of this Act to the carrying on of highway undertakings.
1154.Subsection (1) makes a highway undertaking an undertaking by way of trade.
Section 342: The relevant interest
1155.This section is based on sections 4(2AB) and 20(5) and (6) of CAA 1990. It sets out how the concept of “the relevant interest” in the building in Chapter 3 is to be applied in the case of a highway concession.
1156.Subsection (1) gives the general rule that a highway concession is not regarded as an interest in a road on which construction expenditure has been incurred.
1157.Subsection (2) provides an exception to subsection (1). If:
expenditure has been incurred on the construction of a road by a person; and
at that time that person holds no interest in the road but instead was entitled to a highway concession over it;
then that highway concession can be treated as the relevant interest in relation to that construction expenditure.
1158.Subsection (3) refers to section 344. That section is concerned with a new or renewed concession being treated as an extension of the previous or original concession. This is also to be applied when determining the relevant interest.
Section 343: Balancing adjustment on ending of concession
1159.This section is based on sections 4(1)(da), part of 4(2AA) and 156(e) of CAA 1990. It deals with the balancing adjustment when a highway concession ends.
1160.Subsection (1) provides that the ending of a highway concession is a balancing event, unless it is treated as extended. Subsection (2) identifies the proceeds from such a balancing event.
Section 344: Cases where highway concession is to be treated as extended
1161.This section is based on section 4(2AB) and part of 4(2AA) of CAA 1990. It treats a highway concession as extended if a renewed or new concession includes the whole or part of the road covered by the previous concession. There is then no balancing event.
