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Changes to Scottish Water RCC Payment Terms

Scottish Water has been working on a programme of improvements to the service offered to the Development Community.

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What we are doing

Scottish Water has been working on a programme of improvements to the service offered to the Development Community. Good progress has been made on a number of fronts and there are more being delivered. Within that programme we made a number of changes, as of the 1st April 2017, to the Facilitation Process which supports the connection of developer-constructed assets that transfer into Scottish Water ownership.

As part of the implementation of the new Facilitation Process, we provided customers with a simple set of procedures to enable assets to vest in Scottish Water. The aim of the new process is that it is simpler and quicker for customers to vest assets and so transfer responsibility for operation and maintenance of those assets to Scottish Water.

Following a 12-month transition we will be implementing, as of 1st April 2018, a change in the payment process for Reasonable Cost Contributions (RCC). This is in line with the Vesting of Developer Constructed Assets Policy rolled out as part of the new Facilitation Process. The aim is to create the right incentives for assets to be constructed to the correct specifications and standards, for responsibility for the operation and maintenance of the assets to transfer to Scottish Water, and for RCC payments to be made in full for the assets as soon as they are vested in Scottish Water.

A summary of some of the key points in the new process are set out below:

  • From 1 April 2018, to enable a claim for RCC reimbursement, all necessary assets within a Facilitation Application will require to be successfully vested in Scottish Water.
  • A developer will only be paid RCC once a Transfer Certificate has been issued by Scottish Water, relating to the assets associated with the RCC Claim, and Habitation Certificates have been supplied.
  • Developers can still apply for RCC with a minimum of 5 Habitation Certificates per application as long as a Transfer Certificate has been issued by Scottish Water.
  • The number of Habitation Certificates supplied will be paid in full and no retention will be held.
     

Further information

Further information can be found in the Vesting of Developer Constructed Assets Policy http://www.scottishwater.co.uk/business/connections/connecting-your-property/asset-vesting

 

Frequently Asked Questions:

Q. Why have Scottish Water made this change?

A. This change will align Scottish Water with its statutory duties under RCC regulations and ministerial objectives.

Q. Will a developer still be able to claim the same amount of RCC?

A. Yes, there will be no changes to the current rates or the amount of RCC that Scottish Water will reimburse for an application as part of this process change. Rates may change in the future but not in relation to the new Facilitation Process.

Q. Can a developer still claim RCC prior to all assets being complete that are part of an application?

A. We will require all assets to be completed and vested in Scottish Water that form part of an application before payment is made e.g. if you have a sewer application containing a SUDS, Foul Sewer and Surface water asset we will only make payment once all three assets are vested.

Where one development is part of multiple applications these will be treated individually but developers will still need to consider that there may be dependencies on assets that are part of other applications.

Q. Will you pay water and waste water independently of each other?

A. Yes, all individual applications within Scottish Water are either water or waste water and have individual financial reimbursement agreements (FRA) therefore if you vest all water assets that are part of your water application you will be eligible to apply for the water RCC even if the waste water assets from the same site are not vested.

Q. Will a retention payment still be held for RCC applications?

A. No, once all assets associated with an application are vested we will pay the full 100% of the amount   being claimed for e.g. if there are 100 plots associated with an application and 100 habitation certificates are supplied then we will pay out 100% on the 100 plots once the assets are vested.

Where a developer submits a claim for 70 plots out of 100 and supplies the 70 habitation certificates, we will pay 100% on the 70 plots once the assets are vested.

Q. Will Scottish Water vest one phase of a site where a developer still has other phases that are still under construction?

A. We will only be able to vest assets that have no dependencies on other upstream water or downstream waste water assets. Where there is a dependency we will only be able to vest once the dependencies have vested e.g. if phase 2 of a site has a dependency on assets that are part of the application on phase 1 then we can only vest assets on phase 2 after the assets on phase one are vested.

Q. What if another Developer is working on part of the strategic site?

A. If phase 1 is being built by developer A and phase 2 is being built by developer B and phase 2 is dependent on the upstream assets at phase 1 then we will only be able to vest phase 2 once phase 1 is vested. It will remain the responsibility of developer A to ensure they vest their assets to enable developer B to vest. Scottish Water will not be responsible for developer B being unable to vest where developer A has not complied with Scottish Water request to vest process.

 

New Facilitation Process – Quote Acceptance Changes

As of the 1st April 2017, Scottish Water introduced the Construction Milestone Capture Form which is sent out to Developers with their technical audit letter. The purpose of this document is to capture dates in the developer’s construction plan so that we know the projected date of first property connection, projected date of asset construction and are then able to schedule the relevant site inspections during construction on an appropriate date.

The completed form needs to be returned by the developer following technical approval for every site regardless of the assets that are part of the application. To date compliance from developers has been low in returning this form and this is impacting our ability to arrange these mandatory inspections.

As of the 1st of April 2018 Scottish Water will now require this form to be completed and returned in order to progress your acceptance of our quote and allow creation of an invoice. Any applications that have not supplied a construction milestone capture form prior to or at the point of quote acceptance will not be allowed to progress and will be returned to the customer.

 

Any further questions?

We are sure this new process will be beneficial to both Developers and Scottish Water. In the meantime, if you have any questions or require further detail, please contact DevelopmentOperations@scottishwater.co.uk

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