Two types of organisation primarily provide infrastructure for new connections – the water or sewerage companies themselves and self-lay organisations (SLOs). The SLOs are the companies contracted by developers or developers themselves to provide infrastructure required to supply water or provide drainage at a development site instead of the existing water or sewerage company.
Under the Water Industry Act 1991 (WIA91) the water and sewerage companies can raise charges for connecting properties to their networks. The charges generally relate to the cost of the works to be carried out to enable a supply of water or provide drainage to premises.
The new consultation sets out the principles Ofwat is proposing to use when making determinations relating to charges for new connections, together with guidance on how the regulator would anticipate applying the principles.
Alongside the consultation Ofwat is withdrawing its existing self-lay guidance and dispute handling guidance documents.
Describing the provisions under the WIA91 relating to charges for new connections as “numerous and complex”, Ofwat said a number of other issues concerning the provision of infrastructure for new developments had also been brought to its attention, including the following problems:
- uncertainty as to what costs can be included in charges for new connections;
- uncertainty as to how the different charges interact with each other, if at all;
- substantial variances in the level of charges between companies for equivalent works; and
- lack of transparency as to the legal basis upon which infrastructure is provided.
Deadline for responses to the consultation is 6th February 2012. Click here to access the consultation document.
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