Eversheds' comments follow yesterday's announcement by the UK Government of a public consultation into proposals for a ‘lane rental scheme’, in which utility firms could be charged for digging up the busiest roads during peak times.
Clive Mottram, senior associate in the water group at Eversheds, said that the utility companies have been anticipating the introduction of lane rental charges, i.e. charges for occupying a road while carrying out pipe works, for a considerable time. He said:
“In relation to water companies, when Ofwat set the prices that the companies can charge their customers for 2010 to 2015 it specified a number of issues which might arise during that time and which would entitle the companies to increase their prices (subject to Ofwat’s scrutiny). One of those issues is lane rental.
“Ofwat’s price limits do not include any amount on account of sums which may be payable to highways authorities in relation to the application of permit schemes pursuant to the Traffic Management Act 2004. However, if such sums become payable, a water company can apply to Ofwat to increase its prices.
“In dealing with an application, Ofwat would disallow any costs which might have been avoided by prudent management action. Therefore, water companies will be expected wherever possible to avoid working at busy times of day (i.e. rush hour), when lane rental charges are likely to be higher."
Mr. Mottram added that the impact of the measures upon traffic congestion caused by utility company roadworks would however be limited since the majority of roadworks are carried out not by utilities but by the highways authorities themselves.
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