Reasonable Cost Contribution
Domestic Development – Reasonable Cost Contribution
Connection costs are specified within our Scheme of Charges. If you’re building a development with new local network infrastructure to be vested (water or wastewater), check out our information on reasonable cost contribution below.'Reasonable Cost Contribution' in relation to new local network infrastructure requiring to connect to our existing network assets
Financial contributions are defined within legislation, in accordance with the Water Industry (Scotland) Act 2002. We are required to meet the costs of providing strategic capacity for household purposes only from new developments (Part 4 infrastructure). You are required to meet the costs of providing additional local capacity (Part 2 and 3 infrastructure), where it is readily attributable to a single developer and is not included in a strategic network impact assessment (i.e identified in a standalone network impact assessment). This is subject to a reasonable cost contribution from us for household purposes only.
Scottish Water reallocate Infrastructure Charge revenues to pay for your enhancements to our existing network assets where they are not readily attributable to a particular developer and identified within a strategic network impact assessment. Non-household customers will be required to pay in full for enhancements to our existing network assets directly associated with their non-household requirements.
Current maximum amount of contribution per house
These values are reviewed on an annual basis through our Regulator, the Water Industry Commission for Scotland (WICS).For details on the maximum amount of reasonable cost contribution for new water and sewerage infrastructure to be vested, please see the documents below: Please note: Each development project will have a reasonable cost amount calculated at the design technical audit stage. The amount agreed can vary at any level up to the maximum reasonable cost contribution amount stated, depending on the calculation outcome. When assessing development budgets, do not assume that your development will be eligible for the maximum reasonable cost contribution amount.
Reasonable cost contribution - How it is determined?
The Provision of Water and Sewerage Services (Reasonable Cost) (Scotland) Regulations 2015, determine what our reasonable cost contribution should be, by specifying what will, and will not, be taken into account in calculating the reasonable cost contribution and also by specifying the method for calculating the maximum amount. Further details of your entitlement to our reasonable cost contribution for part 2 and part 3 and to your entitlement to our Infrastructure Charge funding for upgrades to our existing part 3 network assets can also be found in the Scottish Government's Water Services - Charging Principles 2021-2027.
The Regulations and Charging Principles clarify how the costs of different elements of each new connection are shared between customers and us.
The costs associated with all new Part 1 infrastructure are the sole responsibility of the customer.
New local network infrastructure (Part 2) will be funded by the customer. Any enhancements to our existing water and waste water networks (Part 3) where it is readily attributable to a single developer and is not included in a strategic network impact assessment (i.e. identified in a standalone network impact assessment) will also be funded by the customer. The total costs for Part 2 (new) and Part 3 (new or enhancement of existing) as stated above are subject to a reasonable cost contribution from us. Our contribution takes account of the future income that we will receive from the new connection. This information will directly contribute to the calculation used to confirm the level of contribution from us for all eligible Part 2 or Part 3 costs as stated above.
A reasonable cost contribution is available for all new connections whether a new development or a first-time connection to an existing property. However, it is not available for the vesting of existing private local or wastewater network infrastructure or for the enhancement of existing private local water and wastewater network infrastructure to vestable standards.
Definition of Connection Parts
Part 1: The connection from individual premises to a water main or sewer.
Part 2: The water mains and sewers that are site specific and connect developments e.g. a street of houses to trunk mains and trunk sewers and some sustainable urban drainage systems (SUDS).
Part 3: The local bulk infrastructure, such as trunk mains and trunk sewers, water service reservoirs, wastewater pumping systems and some SUDS.
Part 4: The strategic assets such as raw water intakes, water impounding reservoirs, raw water pumping stations and aqueducts, and water and wastewater treatment works.
Advising the RCC agreement for your development site
We will issue you two copies of our Financial Reimbursement Agreement after we have completed our technical audit of your design submissions and supporting materials.
Our Financial Reimbursement Agreement will outline our reasonable cost contribution amount for your development for your eligible Part 2 and Part 3 assets. Once you have reviewed our agreement, you will be required to sign and retain a copy for your own records, and sign and return a copy to us.
If you have any further enquiries regarding:
- General reasonable cost contribution policy
- How this may apply to your specific proposed development
- Non-Domestic reasonable cost contribution policy for Retail development
Please contact our Development Operations team for us to respond.
For further reasonable cost contribution process and policy details see Section 5 (pages 25-27) of our Developer Guide.
