Section 105ZB: Variation and termination of section 104 agreements, Water Industry Act 1991

On the application of a party to a section 104 agreement to vary (or terminate) the agreement, the Authority may—

if it appears to the Authority that it is necessary or expedient that the section 104 agreement should be varied (or terminated),

if the Authority is satisfied, in the case of an application to vary the agreement involving such person as is mentioned in section 104(1)(a), that it is appropriate for work proposed to be done by a person other than the sewerage undertaker to be so done, and

if the Authority is satisfied that variation (or termination) cannot be achieved by agreement within a reasonable time,

by order vary (or terminate) the section 104 agreement.

If an order under subsection (1) is made in relation to a section 104 agreement, the agreement—

has effect subject to the provision made by the order, or

ceases to have effect, as the case may be.

An order under subsection (1) may require any party to the agreement to pay compensation to any other party.

Neither the CMA nor the Authority may exercise, in respect of an agreement to vary or terminate a section 104 agreement, the powers conferred by—

section 32 of the Competition Act 1998 (directions in relation to agreements);

section 35(2) of that Act (interim directions).

Subsection (4)(b) does not apply to the exercise of powers in respect of conduct—

which is connected with an agreement to vary or terminate a section 104 agreement, and

in respect of which section 35(1) of the Competition Act 1998 applies because of an investigation under section 25 of that Act relating to a suspected infringement of the Chapter 2 prohibition imposed by section 18(1) of that Act.

In exercising its functions under this section, the Authority must have regard to the expenses incurred by the sewerage undertaker in complying with its obligations under the section 104 agreement in question and to the desirability of—

facilitating effective competition within the sewerage services industry;

the recovery by the sewerage undertaker of the expenses of complying with its obligations by virtue of this section and securing a reasonable return on its capital;

the ability of the sewerage undertaker to meet its existing obligations, and likely future obligations, to provide sewerage services without having to incur unreasonable expenditure in carrying out works;

not putting at risk the ability of the sewerage undertaker to meet its existing obligations, or likely future obligations, to provide sewerage services.

In this section and sections 105ZC to 105ZI "section 104 agreement" means an agreement with a sewerage undertaker for the vesting of a sewer, drain or sewage disposal works in a sewerage undertaker at a future date or on a future event and includes—

an order under section 105ZA which is deemed to be an agreement by virtue of section 105ZA(5), and

any agreement which has been varied by order under subsection (1).

Section 105ZB: Variation and termination of section 104 agreements

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