REALWorld Law

Construction

Infrastructure and utilities

What arrangements are usually made with the local authorities and utility suppliers in relation to infrastructure (new roads, sewers etc) to support a new development?

Angola

Angola

Under Angolan law, land urbanization is a public function whose costs shall be borne by the state, although the execution of urbanization works foreseen in urban plans or other instruments may be of public or private initiative.

The execution of urbanization works of private initiative is regulated by concession or consultation and is subject to licensing. The license may be granted separately or may be contained in the concession or concertation contract. In addition, the license may cover the related allotment and construction operations.

Australia

Australia

Highways

Under the states' and territories' local planning legislation, the highways authority and a developer/landowner can enter into an agreement whereby the authority agrees to carry out works to the public highway which concern the development (eg junction improvements) subject to the costs being borne by the developer.

Sewers

As a condition of development consent for a proposed development, the consent of the relevant authority (council) under state and territorial legislation will require that satisfactory arrangements be made for the payment of contributions and the provision of services to the new development.

Upon receiving a development application, the local authority will investigate the impact of the proposed development on its water and sewerage system. A response is then issued to the developer outlining the charges and/or works that the developer must pay and/or construct for the development. When all the contributions/fees are paid, and works complete and passed by council, then a Certificate of Compliance will be issued.

Belgium

Belgium

Infrastructure and utilities are mostly governed by the public planning law of the Flemish, Walloon and Brussels Capital Regions, and are therefore regulated in:

  1. The Code for Territorial Development of 20 July 2016 which came into force on 1 June 2017 (Walloon Region)
  2. The Brussels Code regarding Public Planning of 9 April 2004 (Brussels Capital Region) which will be amended by a decree adopted by the Parliament of the Brussels Capital Region on 13 October 2017, still to be published in the Official State Gazette
  3. The Flemish Public Planning Codex of 15 May 2009 (Flemish Region)

In all three regions, in the case of an application for an allotment permit (which includes the construction of new roads), the Municipal Legislative Body has to decide on the infrastructure and utilities requirements, before the Municipal Council can grant an allotment permit.

Most local building regulations have been created to govern connections to sewage systems. When deciding on individual building permit applications, the municipal council usually refers to this building regulation, or imposes related conditions in the building permit.

In the case of the construction of roads, utilities and infrastructure, a separate permit procedure exists in relation to what is in the ‘public interest’. Related permit applications have to be made at Ministerial level, particularly if the application relates directly or indirectly to private project development.

Bosnia-Herzegovina

Bosnia-Herzegovina

Investors or developers are usually required to secure the necessary infrastructure to support new developments.

Under the law of the Republika Srpska urban construction land can be either prepared or unprepared. Prepared urban construction land is equipped by the municipal authorities with the necessary infrastructure such as roads, electricity, water, sewers, etc.

Canada

Canada

Development incentives and infrastructure support provided by local authorities and utilities vary by jurisdiction and often, within the same jurisdiction, can differ from project to project based upon local need and other market forces. Counsel in Canada can assist in assessing incentives or other arrangements available for a specific project.

China

China

Land grant contracts will usually include general requirements that the grantee will enter into arrangements with local authorities and utility suppliers in relation to new supporting infrastructure.

Croatia

Croatia

It has recently become more common to enter into specific development agreements with public authorities to facilitate, for example, the provision of access roads.

Czech Republic

Czech Republic

Infrastructure issues are an integral part of the entire process. When the general rules on regional planning for a particular area are set the possible projections for infrastructure development are reflected. Proposals for the construction of infrastructure (sewers, water, roads, etc) are part of the construction project. The requirements of the transport department and of other authorities and relevant departments are reflected in planning permission and all of these conditions are contained in the building permission.

As regards financing, in the case of communications (ie roads), the investor usually bears all costs where the road is located on land in the ownership of the investor. However, responsibility for roads is often, by agreement with the municipality, delegated to the municipality to ensure proper maintenance. In the case of sewers, ducts etc, all are paid for by the private entity or by agreement between all relevant persons who are connected to the infrastructure.

Denmark

Denmark

On a case by case basis, local authorities determine the arrangements relating to infrastructure that are required for the construction.

France

France

Under the French Planning Code (Code de l'urbanisme), the owner (maître d'ouvrage) must make a financial contribution in relation to infrastructure in order to support new development. The owner may be released from this liability by carrying out the infrastructure related works itself.

Germany

Germany

Any plot of land on which a development is planned must be connected to public infrastructure and utilities, otherwise the building authority may refuse to issue a building permit or may impose a building ban. In order to connect the project to the utility networks, the developer enters into an agreement with the relative utility supplier.

As for the connection to public roads, the municipalities may impose dues for the connection and may require the developer to transfer land to the municipality to facilitate the construction of a road. In this regard, it is particularly common for developers of large building projects to enter into agreements under public law which oblige them to construct the relevant connection at their own cost and then to transfer the areas on which the roadway has been constructed to the authorities free of charge.

Hong Kong

Hong Kong

Arrangements are usually made with the Hong Kong Police Force and the Transport Department which are the agencies through which transport policy is enforced. Developers also work closely with other departments such as the Water Supplies Department, Drainage Services Department, Civil Engineering and Development Department, Buildings Department, etc, regarding roads and associated drainage. In performing building development works adjacent to public roads, developers also have frequent and close contacts with the utility operators.

Hungary

Hungary

It has become rather common in recent years for developers to sign a community development agreement with the local municipality, in which the developer undertakes to finance the rezoning costs of the development area, to carry out certain public works, such as landscaping or the construction of roads, public parking spaces or pavements. The works and structures so constructed would thereafter be handed over to the local municipality free of charge.

In the case of substantial greenfield developments local municipalities may participate in, and partially finance, the costs of creating the necessary utility connections.

Ireland

Ireland

Developers must apply for planning permission for all new developments. Each planning permission, depending on the complexity of the development, will contain conditions which must be satisfied prior to construction in relation to all utilities. It may also require payment of fees for road connections and drainage, which the local authority will secure. However, it is the responsibility of the developer to liaise with utility companies in relation to obtaining utility connections, eg gas and electricity.

Italy

Italy

According to Italian law the construction of a new development involves the prior issue of an administrative permit that usually sets forth the infrastructure works to be carried out in order to support the new development. Depending on the type of permit issued by the competent local authority, the developer may be requested either to construct, at its cost and expense, the necessary infrastructure works should the building works be regulated by a 'Convenzione' or, should such infrastructures already exist due to the fact that the building works are carried out in an already developed area, to pay to the local authority monetary contributions in terms of urbanization fees.

Japan

Japan

Utility suppliers (electric company, gas company etc.) carry out utility infrastructure construction at the owner's expense.

Also, for water supply works, the owner must submit a notification to the relevant local government and order such works to a construction company designated by the relevant local government.

Netherlands

Netherlands

Project developers and the government usually enter into agreements regarding infrastructure and mains services. Project developers usually make monetary contributions towards the costs that the government will incur in installing mains services. A development agreement will be entered into for this purpose.

If a project also includes infrastructure works, those works are commissioned by the government. The government lays down specific rules regarding the carrying out of such works.

Nigeria

Nigeria

Infrastructure and utility arrangements to support a new development are dependent on the project sponsor. Where the project is privately owned the provision of infrastructures and utilities (roads, sewers etc) are the responsibility of the owner/developer. The development of infrastructure is subject to layout design planning approvals showing the land and proposed infrastructure.

Where the project is a public sector initiative or a public private partnership project, there are usually arrangements with the utility suppliers in relation to the necessary infrastructure required in the real estate development.

Infrastructure development should be in the contemplation of the project developers and it is usual to liaise with the relevant utility companies in relation to obtaining connections such as electricity or water. Electricity generation and distribution has been the sole responsibility of a Government owned Corporation but now currently liberalized with private sector involvement and other power generation companies participating. The developer has the option of connecting to the general power grid and making arrangements with the private power companies for supply of energy.

Norway

Norway

The requirements with regard to infrastructure (for example roads and sewers), are found in the Planning and Building Act of 2008. The Act regulates both developers' and public authorities’ rights and obligations in respect of infrastructure arrangements.

The development of a site will be subject to requirements regarding access, water supply and the drainage system. The requirements are set out in chapter 18 of the Planning and Building Act of 2008 . Under section 18-1 of this Act, there is a requirement to create a public road and to install public water and drainage pipes in the immediate vicinity of the site. The road and pipes must meet the quality requirements set out in local regulations, the relevant zoning plan and the requirements set out in the Planning and Building Act. A certificate of completion or a provisional permission for the building is usually not granted before these requirements are met.

The Planning and Building Act states that the municipality is responsible for the upkeep of works relating to roads, water and drainage, once completed.

Private developers who have been required to construct a public road, public water system or drainage installations can require other landowners who benefit from the infrastructure project to contribute towards some of the cost of the works.

In large and complex projects, landowners or developers often enter into development agreements with the municipality. Such development agreements generally regulate the implementation and allocation of costs associated with major infrastructure projects. The agreements often replicate the requirements set out in the Planning and Building Act. In some cases, such an agreement may even be a pre-condition to securing permission to carry out the project.

Poland

Poland

This depends on the nature of the development and can only be determined on a case-by-case basis. Generally, the agreement is entered into between a local planning authority and/or utility suppliers regarding the provision of services and connection of new infrastructure, such as new roads, water, sewage, gas, electricity installations. The costs of services and infrastructure on public land is met by local authorities and utility suppliers. In general, the cost of infrastructure on private land to be connected to public infrastructure system is met by the owner.

Portugal

Portugal

As part of the process of obtaining a licence, from the local authorities, for construction work to proceed, the developer may be required to fulfil certain conditions relating to the associated infrastructure that is required to support the development. For example, it is common for a developer to accept an obligation to build roads, electrical grids and other support infrastructures, in accordance with the specifications required by the local authority grantor of the construction permit or to transfer, to the municipality, part of its land and to build parking spaces, gardens etc on it.

Romania

Romania

Agreements with Romanian public authorities may be entered into in relation to infrastructure under the applicable legislation regarding public procurement, provision of services and concessions.

Agreements with the utility suppliers must be concluded during the construction work as well as after the work is complete.

Russia

Russia

Arrangements for utilities for new developments are implemented on the basis of agreements entered into between the utility provider and the developer. In order to provide a new development with utilities the developer will approach utility providers or the local authority to obtain confirmation that it will be possible to provide the necessary infrastructure.

Once the possibility of the provision of utilities to a new development has been confirmed, the utility provider will issue the developer with a list of 'technical conditions' – a document which sets out the maximum guaranteed volumes of services which will be available – together with a list of actions that the developer must carry out (such as the development of some of the engineering infrastructure required for the provision of the utilities) as a condition of the supply.

A local authority's consent to a new development may also be made conditional upon the developer providing local infrastructure (such as roads, connections to utilities etc) which will be transferred to the ownership of the local authority once the development is complete.

Slovak Republic

Slovak Republic

Infrastructure and utilities are considered to be elements ancillary to building works and structures. As long as their construction does not significantly affect the environment, it is only necessary to submit a written notice of the creation of infrastructure and utility elements to the relevant building office. Prior to the construction of such matters and prior to the issuance of notification to the relevant building office, the developer must have in place the project documentation for the construction of the elements of infrastructure and utilities. The developer must also have the consents of the respective bodies (eg the consent of the relevant district office for environment protection).

The developer of the building enters into arrangements with the relevant utility supplier (electricity, water, gas and canalisation) in order to connect the infrastructure to the utility networks. For example, a developer that sells plots of land for the subsequent construction of houses may enter into a donation agreement with the respective municipality. As a result of this agreement, the developer will 'donate' the access road at the site to the municipality following completion of the road, thereby releasing himself from his related duty to operate, maintain and clean the respective road.

Spain

Spain

Depending on the nature of the development, the developer will enter into specific agreements with the utility companies. The location of the project will also determine which reports and authorisations from different authorities are required (eg from the roads department, rail network authority, coastal authority etc) within the licensing process.

Sweden

Sweden

During the building permit application process the developer often discusses the zoning plan with the municipality and the developer is often given responsibility for creating the infrastructure to support the new development.

Thailand

Thailand

Utility arrangements are normally made prior to the construction of a building with utility suppliers. In Thailand, most utility suppliers are operated by public entities therefore, applications for connection to utilities will be dealt with in accordance with the rules and regulations of the relevant authority.

United Arab Emirates - Abu Dhabi

United Arab Emirates - Abu Dhabi

The main agreements are with:

  • ADDC (Abu Dhabi Distribution Company): ADDC must provide two separate approvals in relation to the supply of water and the supply of electricity. The developer will be responsible for the cost of building any connecting infrastructure.
  • ADSSC (Abu Dhabi Sewerage Services Company): ADSSC must approve the connection to the public sewerage system. The developer will be responsible for the cost of building the connecting pipeline and other infrastructure.
  • Department of Transport: The Department of Transport must approve the development of any part of the road network. This development will be carried out at the developer’s expense.
  • GASCO (Abu Dhabi Gas Industries Limited): GASCO must approve any proposed connection to the natural gas grid. The developer will be responsible for the cost of building any connecting infrastructure.
United Arab Emirates - Dubai

United Arab Emirates - Dubai

It is generally the responsibility of the developer/owner to ensure that utilities will and can be provided to the site. During the planning and design phase of the project the developer/owner must obtain Non-Objection Certificates (NOC's) from each of the utility suppliers below.

  • DEWA (Dubai Electricity and Water Authority)
  • RTA (Roads and Transport Authority)
  • Dubai Municipality
  • Etisalat (telecommunications)

Once construction is complete NOC's will again need to be obtained for the Completion Certificate to be issued.

UK - England and Wales UK - England and Wales

UK - England and Wales

The main agreements are:

  • Section 106 Agreement: A Section 106 of the Town and Country Planning Act 1990 agreement is entered into between a local planning authority and a developer/landowner and is used to support the provision of services and infrastructure, such as highways, recreational facilities, education, health and affordable housing. The obligations bind the land and, therefore, can restrict the development or use of the land in any specified way and require a sum or sums of money to be paid to the local planning authority
  • Section 278 Agreement: A Section 278 Highways Act 1980 agreement is entered into between the highways authority and the developer/landowner. The authority agrees to carry out works to the public highway and concerning the development (eg. junction improvements) at the cost of the developer
  • Section 38 Agreement: A Section 38 Highways Act 1980 agreement is often entered in conjunction with a Section 278 Agreement (often in the same document) and provides for the dedication and adoption of land as new public highway; certain estate roads, access ways and cycle paths are then built by the developer and adopted by the highways authority as public highway maintainable at the public expense
  • Section 104 Agreement: A Section 104 Water Industry Act 1991 agreement provides for the connection of a development to the public sewerage system by way of the adoption of the pipeline works by the relevant water company following their construction (usually by the developer). Generally, entered into in standard form as published in consultation with the water and development industries
UK - Scotland

UK - Scotland

The main agreements are:

Section 75 agreement

An agreement under section 75 of the Town and Country Planning (Scotland) Act 1997 is entered into between a local planning authority and a developer/landowner and is used to support the provision of services and infrastructure, such as highways, recreational facilities, education, health and affordable housing, after planning permission is awarded. The Section 75 Agreement is normally recorded in the Land Register of Scotland so that its obligations will bind to the land and thereby restrict the development or use of the land in any specified way and require a sum or sums of money to be paid to the local planning authority.

Section  69 agreement

An agreement under Section 69 of the Local Government (Scotland) Act 1973 is entered into between a local planning authority and a developer/landowner and is (in common with a Section 75 Agreement) used to support the provision of services and infrastructure (eg the payment of a financial contribution to the cost of providing new public infrastructure such as roads or sewers). Usually it is entered into before Planning Permission is awarded and, as the obligations of the developer/landowner must be satisfied before planning permission is issued, it is not normally recorded in the Land Register of Scotland (unlike a Section 75 Agreement).

Section 48 agreement

A Section 48 Roads (Scotland) Act 1984 agreement is entered into between the highways authority and the developer/landowner. The authority agrees to carry out works to the public highway and concerning the development (eg junction improvements) at the cost of the developer.

Ukraine

Ukraine

For the period of construction, developers in Ukraine usually enter into temporary agreements with utility suppliers (water, electricity, sewerage etc.) to secure the construction site with the utility services necessary for its construction needs. After completion of the construction works, the company which owns/manages the building enters into permanent agreements with utility suppliers.

Apart from agreements with utility suppliers, under Ukrainian law, developers are also obliged to enter into agreements with local authorities under which payments for development of the settlement's infrastructure must be made. This payment must be made before the new building is commissioned. The amount of the payment is to be defined by the local authorities and is not to exceed 10% of the estimated value of construction for non-residential buildings and 4 percent for residential buildings.

United States

United States

Development incentives and infrastructure support provided by local authorities and utilities vary by jurisdiction and often, within the same jurisdiction, can differ from project to project based upon local need and other market forces. Counsel in the US can assist in assessing incentives or other arrangements available for a specific project.

Zimbabwe

Zimbabwe

The construction of infrastructure to support a new development is ordinarily permitted in a permit issued by the local authority. The local authority would state the minimum specifications of the infrastructure or the need for approvals from the relevant utility that governs the infrastructure. For new roads and sewers the city council or rural district council, whichever is applicable, would authorize this, while electricity supply would be authorized by the Zimbabwe Electricity Transmission and Distribution Company. Water connections would be approved by the Zimbabwe National Water Authority.