ANNEX B FINANCING NEW INFRASTRUCTURE
The responsibility for financing new infrastructure can be summarised as follows:
- Minor Infrastructure (Part 1 assets): Developers will pay for the immediate connection from a property to a water main or sewer i.e. the service pipe and drain.
- Local Infrastructure (Part 2 & 3 assets): Scottish Water will meet the costs of local infrastructure up to a limit based on the future income that the new connection will bring.
- Strategic Infrastructure (Part 4 assets): Scottish Water is responsible for meeting the future capacity requirements for strategic infrastructure of all anticipated new development which can be met within reasonable costs.
N.B. See also diagram at paragraph 6
Under Quality and Standards III, investments in strategic infrastructure, where they can be done within reasonable costs, will be made by Scottish Water. These major long-term assets are necessary not only for future customers but existing ones and are therefore not attributable to any single development proposal.
Developers continue to be responsible for the immediate connection from a property to the point where it joins a water main or sewer (minor infrastructure). Between this point and the strategic infrastructure, the Provision of Water and Sewerage Services (Reasonable Cost) (Scotland) Regulations 2006 provides a legal basis for apportioning costs for connecting domestic properties to water and drainage networks and calculating the maximum contribution Scottish Water might be required to make. This reflects the costs and benefits of that infrastructure to Scottish Water and its customers. A non-statutory method exists for calculating Scottish Water's contribution to the cost of connecting non-domestic properties. For a connection to go ahead, developers will have to find a means of financing any costs above the contribution that Scottish Water is required to make. 10
In this way, existing customers continue to pay for the system as a whole and developers will pay towards expanding the system in areas where local capacity is not available, less a contribution that reflects the benefit the additional customers bring to Scottish Water, and any other relevant work which Scottish Water is required to do as part of its investment programme.