ARTICLE · 07 JULY 2006

Drought orders in PFI projects

CMS Cameron McKenna Nabarro Olswang

Explore more from CMS Cameron McKenna Nabarro Olswang

Recently a number of water utilities have either been granted or applied for drought orders under the Water Resources Act 1991. A drought order allows water utilities to ban "non-essential uses" of water in a specified area whilst the drought order is in force.

United KingdomGovernment, Public Sector

Trevor Butcher

Robert Gray

Recently a number of water utilities have either been granted or applied for drought orders under the Water Resources Act 1991. A drought order allows water utilities to ban "non-essential uses" of water in a specified area whilst the drought order is in force. Drought orders raise a number of issues for the PFI industry including whether:

a drought order is a change in law in a PFI project entered into using required drafting contained in HM Treasury's Standardisation of PFI Contracts (SOPC)

what project companies could do to address any service or performance issues created by a drought order, again in the context of the required drafting contained in SOPC.

SOPC required drafting in relation to change in law includes wording stating that any legislation that comes into force after the date of the relevant PFI contract which has not been published prior to the date of the PFI contract is a "Change in Law". The definition of legislation includes orders made under or to be

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