Paragraph 165 Expenses and costsI1

England and Wales

(1)

Subject to the following provisions of this paragraph, the undertaker must pay to Affinity Water within 30 days of receipt of an itemised invoice or claim from Affinity Water all charges, costs and expenses reasonably anticipated within the following three months or reasonably and properly incurred by Affinity Water but excluding any consequential loss or indirect loss in, or in connection with—

(a)

the supervision, inspection, removal, relaying, replacing, alteration or protection of any of Affinity Water’s apparatus or the supervision, inspection, adoption and construction of any new apparatus or alternative apparatus which may be required in connection with the authorised works; and

(b)

the consideration and approval of any plan as required by this Part of this Schedule.

(2)

The costs as referred to in sub-paragraphs (1)(a) and 1(b) are to include but not be limited to—

(a)

any costs reasonably incurred by or compensation properly paid by Affinity Water in connection with the acquisition of rights or the exercise of statutory powers for such apparatus including without limitation all costs incurred by Affinity Water as a consequence of Affinity Water—

(i)

using its own compulsory purchase powers to acquire any necessary rights under paragraph 163(3); or

(ii)

exercising any compulsory purchase powers in the Order transferred to or benefitting Affinity Water;

(b)

in connection with the cost of the carrying out of any diversion work or the provision of any alternative apparatus, where no written diversion agreement is otherwise in place;

(c)

the cutting off of any of Affinity Water’s apparatus from Affinity Water’s any other apparatus or the making safe of redundant apparatus;

(d)

the approval of plans;

(e)

the carrying out of protective works, plus a capitalised sum to cover the cost of maintaining and renewing permanent protective works;

(f)

the survey of any land, apparatus or works, the inspection and monitoring of works or the installation or removal of any temporary works as referred to in this Part of this Schedule;

(g)

any costs reasonably necessary in consequence of the execution of any such works as are referred to in this Part of this Schedule; and

(h)

any costs incurred as a result of any penalties or fines imposed on Affinity Water by any regulator directly resulting from the execution of or failure to execute in accordance with this Part of this Schedule any such works as are referred to in this Part of this Schedule.

(3)

The value of any of Affinity Water’s apparatus that is removed and re-used by Affinity Water, or any value recovered by Affinity Water from the scrapping of any apparatus removed and not re-used, under the provisions of this Part of this Schedule must be deducted from any sum payable under sub-paragraph (1), that value being calculated after removal.

(4)

If in accordance with the provisions of this Part of this Schedule—

(a)

apparatus of better type, of greater capacity or of greater dimensions is placed by Affinity Water in substitution for existing apparatus of worse type, of smaller capacity or of smaller dimensions; or

(b)

apparatus (whether existing apparatus or apparatus substituted for existing apparatus) is placed by Affinity Water at a depth greater than the depth at which the existing apparatus was situated,

and the placing of apparatus of that type or capacity or of those dimensions or the placing of apparatus at that depth, as the case may be, is not agreed by the undertaker or, in default of agreement, is not determined by arbitration in accordance with article 47 (arbitration) to be necessary, then, if such placing involves cost in the construction of works under this Part of this Schedule exceeding that which would have been involved if the apparatus placed had been of the existing type, capacity or dimensions, or at the existing depth, as the case may be, the amount which apart from this sub-paragraph would be payable to Affinity Water by virtue of sub-paragraph (1) must be reduced by the amount of that excess.

(5)

For the purposes of sub-paragraph (4)—

(a)

an extension of apparatus to a length greater than the length of existing apparatus is not to be treated as a placing of apparatus of greater dimensions than those of the existing apparatus;

(b)

where it is not possible in the circumstances to obtain the existing type of apparatus at the same capacity and dimensions or to place it at the existing depth, the capacity, dimensions and depth of the apparatus is to be treated as if it has been agreed or so determined; and

(c)

where the provision of a joint in a pipe or cable is agreed, or is determined to be necessary, the consequential provision of a jointing chamber or of an inspection chamber is to be treated as if it also had been agreed or had been so determined.

(6)

An amount which apart from this sub-paragraph would be payable to Affinity Water in respect of works by virtue of sub-paragraph (1) must, if the works include the placing of apparatus provided in substitution for apparatus placed more than 7 years and 6 months earlier so as to confer on Affinity Water any financial benefit by deferment of the time for renewal of the apparatus in the ordinary course, be reduced by the amount which represents that benefit.

(7)

The amount of the reduction under sub-paragraph (6) must be calculated using the methodology set out in paragraph 29 of HAUC Advice Note and—

(a)

the 1991 Act and any regulations made under that Act (including the cost-sharing regulations made under section 85 (Sharing of cost of necessary measures) of that Act); and

(b)

any other codes of practice or guidance issued under the 1991 Act or regulations made under that Act,

do not apply in respect of any such calculation under sub-paragraph (6).

(8)

In relation to any anticipated costs to be payable by the undertaker to Affinity Water pursuant to paragraph 165(1) Affinity Water must provide the undertaker, on receipt of a request from the undertaker, with a schedule showing its estimate and with such information as may reasonably enable the undertaker to assess the reasonableness of any such estimate or claim made or to be made pursuant to this paragraph 165.

(9)

Affinity Water must give the undertaker a final account of the costs in relation to which a schedule has been provided under sub-paragraph (8) and within 30 days of the issue of the final account—

(a)

if the final account shows a further sum as due to Affinity Water the undertaker must pay to Affinity Water the sum shown due to it; and

(b)

if the account shows that the payment or payments previously made by the undertaker have exceeded the costs incurred by Affinity Water, Affinity Water must refund the difference to the undertaker.

(10)

Where the undertaker does not agree that an estimate provided by Affinity Water under sub-paragraph (8) is reasonable, the undertaker must notify Affinity Water of that within 15 days of receiving the schedule of estimate. The undertaker and Affinity Water will escalate the estimate internally and will each nominate a senior officer to attend a discussion on the estimate. Where the parties fail to reach agreement following such discussion, any difference or dispute over reasonableness of any excess sum shall be determined by expert determination in accordance with paragraph 168.

Annotations

Commencement

I1: Sch. 9 para. 165 in force at 8.1.2026, see art. 1