HC Deb 02 February 1990 vol 166 cc370-1W
Mr. Morgan

To ask the Secretary of State for Wales (1) if he will place copies in the Library of agreements he reached with Welsh Water in relation to the allocation of unforseeable costs arising from the achievement of new or unexpected water quality standards within the artificial lake to be created by the proposed Cardiff bay barrage, via the K factor, the cost pass-through formula to customers, as distinct from the shareholders;

(2) what agreement he has reached with Welsh Water in respect of the K factor, cost pass-through mechanism, for any costs involved in meeting new or enhanced water quality standards within the artificial lake created by the proposed Cardiff hay barrage, that are not met by the Cardiff Bay Development Corporation; and if he will publish details;

(3) what agreements he reached with Welsh Water Cyf, or Welsh Water Authority prior to its privatisation to allocate all unforseeable costs related to water quality standards in the inland lake created by the proposed Cardiff bay barrage to Welsh Water customers through the K factor, the cost pass-through mechanism and not to its shareholders;

(4) when he reached agreement with Welsh Water Authority or Welsh Water Cyf to allocate any unforseeable costs related to the achievement of new or unexpected water quality standards within the lake to be created by the proposed Cardiff bay barrage to the customers of Welsh Water, through the K factor, the cost pass-through mechanism and not to its shareholders.

Mr. Grist

The Cardiff Bay Barrage Bill currently before the House seeks to ensure that any reasonable costs incurred by organisations or individuals as a result of the construction of the barrage that would not otherwise occur are met by the promoters of the Bill.

The Bill therefore provides that the costs of carrying out necessary works or operations outside the inland bay to maintain prescribed water quality standards in the inland bay will be met by the promoters in the 20-year period following the commencement of impoundment. The period is in line with all other such undertakings in the Bill.

The cost of works undertaken within the inland bay to maintain water quality will be the responsibility of the promoters.

These provisions were fully recognised and made known at the time of flotation of Welsh Water. The prospectus set out that expenditure arising from changes to discharge consents resulting from the construction of the barrage to the extent not covered by the promoters would be eligible for consideration by the Director General of Water Services for specific K adjustment in the normal way. These arrangements are described in section 9 of the prospectus, a copy of which was placed in the Library in November 1989.

Part IV of condition B of the licence appointing water and sewerage undertakers, a copy of which is also in the Library, fully sets out the mechanism by which K may be adjusted.