Section 51C: Variation and termination of section 51A agreements, Water Industry Act 1991

On the application of a party to a section 51A 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 51A agreement should be varied (or terminated),

if the Authority is satisfied, in the case of an application to vary the agreement, that it is appropriate for work proposed to be done by a person other than the water 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 51A agreement.

If an order under subsection (1) is made in relation to a section 51A 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 51A 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 51A 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 water undertaker in complying with its obligations under the section 51A agreement in question and to the desirability of—

facilitating effective competition within the water supply industry;

the recovery by the water 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 water undertaker to meet its existing obligations, and likely future obligations, to supply water without having to incur unreasonable expenditure in carrying out works;

not putting at risk the ability of the water undertaker to meet its existing obligations, or likely future obligations, to supply water.

In this section and sections 51CA to 51CG "section 51A agreement" means an agreement with a water undertaker for the vesting of a water main or service pipe in a water undertaker at a future date and includes—

an order under section 51B which is deemed to be an agreement by virtue of section 51B(5), and

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

Section 51C: Variation and termination of section 51A agreements

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