Section 43A: Calculation of "discounted aggregate deficit" for the purposes of section 42, Water Industry Act 1991

For the purposes of section 42 above the discounted aggregate deficit on a water main is the amount equal to the sum of the estimated relevant deficits for each of the twelve years following the provision of the main, in each case discounted in accordance with subsection (6) below.

The estimated relevant deficit for any year is the amount (if any) by which the estimated revenue in respect of the water main for that year would be exceeded by the annual borrowing costs of a loan of the amount required for the provision of that main.

Subsections (2) to (6), (8) and (9) of section 43 above (which relate to the annual borrowing costs of a loan of the amount required for the provision of a water main) shall apply for the purposes of this section as they apply for the purposes of that.

Any reference in this section to the estimated revenue in respect of a water main for any year—

in relation to premises expected to be connected with the main and supplied with water by a water undertaker, is a reference to so much of the aggregate of any charges expected to be payable to the undertaker for the provision of services in the course of that year as would represent charges—

imposed by the undertaker in relation to those premises, and

reasonably attributable to the provision of a supply of water (whether or not for domestic purposes) to those premises by means of that main; and

in relation to premises expected to be connected with the main and supplied with water by a licensed water supplier, is a reference to so much of the aggregate of any charges expected to be made during the course of that year as would be—

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

reasonably attributable to the use of that main for the purpose of the supplier's supplying water to those premises.

For the purpose of calculating estimated revenue under subsection (4) above, a thing is expected to be the case if, at the time the calculation is made, it is reasonably likely to occur.

The estimated relevant deficit for a year mentioned in subsection (1) above shall be discounted in order to determine its net present value by applying such factor, and in accordance with such other provision, as may be determined by the Authority.

A determination made by the Authority for the purposes of subsection (6) above—

may be made in relation to the provision of a particular water main or in relation to the provision of water mains generally; and

may be revoked at any time except in relation to a water main in respect of which the conditions referred to in section 42(1) above have already been satisfied.

Section 43A: Calculation of "discounted aggregate deficit" for the purposes of section 42

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