Reservoirs – the legal pitfalls

Building a reservoir is now a real possibility for an increasing number of landowners. Here are some of the legal issues that may affect the land and impact on where you locate your reservoir.

Public rights of way

Public rights of way (footpaths, bridleways or restricted byways) are not easily lost, even through periods of non-use. If your reservoir is less than 0.5 hectares and complies with the Town and Country Planning (General Permitted Development) Order 1995 (see schedule 2 part 6) it may be possible to construct it without submitting a planning application. Therefore, it is important to ensure that you do not unintentionally construct the reservoir over a right of way, as the district council could require you to restore the right of way – a potentially expensive mistake.

Surveying authorities (usually county councils) are required to produce a definitive map showing rights of way. Ensure that your advisers look at the definitive map. If you find that a right of way crosses your proposed site, you will need to offer an alternative right of way and follow one of the statutory routes for diverting it.

Town and Country Planning Act 1990 section 257

This section allows the local authority to divert a right of way if it is “satisfied that it is necessary to do so in order to enable development to be carried out”. If your reservoir requires planning permission, then it is sensible to deal with this point at the planning application stage as any diversion order would be in accordance with the planning permission.

Highways Act 1980 section 119

Section 119 allows a council to divert a right of way if it is “in the interests of the owner”. However, the council must be satisfied that the new path “will not be substantially less convenient to the public”, ie, the new route should not be significantly longer. Once the order is made, it will be advertised and the public will have an opportunity to object. If the order is unopposed, the council can confirm the order. If not, the order must be confirmed by the Secretary of State. Before such confirmation, regard must be given to “the effect which the diversion would have on public enjoyment of the path or way as a whole”.

Other private rights

You will be able to see if overhead cables cross the proposed site but can you remember if there are any buried water mains or gas pipelines running under the site? Can your neighbours come on to your land to maintain their boundary? Just because they haven't exercised this right for a while does not mean that they (or their successor) cannot do so in the future.

The only way of knowing what legal rights affect the reservoir site is to inspect your legal title. If the proposed site is subject to such easements, it may be better to choose a different site. However, it may be worth checking your legal documents with a lawyer as you may have the right to ask the utility company or the owner of the right to move the apparatus, at their expense.

If adjoining landowners have rights over your land, you could agree a release of the rights, although your neighbour may require some consideration in exchange. Any release of legal rights will require new documents to be drawn up, which will involve additional expense.

Finding out about the legal rights that affect your land is essential. The earlier you identify potential legal problems the more likely it is that you will be able to address the issues or, depending on cost, relocate the reservoir to an alternative part of your land.

Check your legal land title – easements may influence your choice of reservoir site

• Public rights of way are not easily lost – but they can be diverted

• Identify legal issues early to avoid problems later

Building a reservoir – the right option

Given the increasing difficulty of obtaining summer (low-flow) abstraction licences, and the fear that climate change will make existing summer licences less reliable, many farmers are questioning whether an on-farm irrigation reservoir would be the right option for the future. Once water is in the reservoir, it is completely in the owner’s control, removing one uncertainty from crop planning.

Many farmers have already invested in an on-farm irrigation reservoir. Around 40 per cent of respondents to Defra’s 2005 irrigation survey stated they already had some form of on-farm water storage and about 30 per cent of the water used that year (a rather wet year admittedly) came from storage. Similarly, Environment Agency data suggests that about 30 per cent of licensed abstraction and 20 per cent of actual abstraction for spray irrigation was for storage.

A substantial investment

But building reservoirs is expensive and will involve a substantial investment of management time and effort. It pays to be sure of your need early on. Building a reservoir is a clear commitment to your future farming plans – they can’t easily be sold like an unwanted harvester or extra land. The increased cost of irrigation may change your idea of whether irrigation is economic on lower value crops and persuade you to apply less and look for greater efficiency. In contrast, the increased reliability of your water supply could open up new markets – indeed water storage is becoming a prerequisite for winning supply contracts for some markets. Trading unused water to neighbours from your reservoir could also generate an additional income stream.

Water demand and supply

For high-value crops, you may want to cater for a more extreme dry year than the normal fifth driest year in twenty, though this would mean storing some water that is only rarely used. For the longer term, you should also be thinking of the impact of climate change. For England, this may increase irrigation, but more importantly it will change the reliability of your water sources and the requirements of your market. Will a hotter summer demand more salad crops? And how will it affect your competitors internationally?

The reservoir capacity does not necessarily have to match your annual needs unless the Environment Agency is insisting you give up all your summer licences. One option may be a reservoir to meet demand later in the season. In wet years, you may not even use it, but it will have been invaluable as the “insurance policy”. Where water resources are unreliable, it may pay to build a reservoir larger than the allowed annual abstraction – in most years you are going to be carrying water forward anyway.

The water source may itself determine the size, location and feasibility of your reservoir, and deserves very close attention. Would it be safer to have two alternative sources – a surface water and a groundwater source are complementary, since the surface water drought often occurs the season before the groundwater drought. Rainwater harvesting also becomes easier once you have a storage facility. With the right licence, you can also top up your reservoir during high-flow events (aka floods) in the summer.

Choosing the best site

Factors as diverse as soils, topography, access, archaeological remains, electricity supply and landscape planning need to be addressed. Siting the reservoir near the stream or river source is often suggested, but beware of flooding and high water levels, particularly for lined reservoirs. In energy efficiency terms, it may be more sensible to place the reservoir near to and/or higher than the irrigated area, pumping slowly in over the winter with higher efficiency pumps than could be justified for the shorter irrigation season. Putting the reservoir “on top of the hill” is not a stupid idea – you get the pressure back when you irrigate.

There is dispute over whether one large reservoir is better than several smaller ones. Certainly, there can be economies of scale in both planning and construction and many farmers sensibly only want to go through the process once. Alternatively, two smaller reservoirs may fit the site better, give a bit more flexibility and reliability (reservoirs do occasionally fail) and allow the investment to be phased over many years.

Shared reservoirs

Given the cost, it can be very sensible to share reservoirs. This may be through some form of legal partnership, a long-term water supply contract or simply a more ad hoc arrangement. Landlords might be persuaded to finance the capital cost for a group of tenants in return for higher rents. Shared reservoirs are more likely to receive part funding through the regional development agencies.

Dealing with the environment

Last, but certainly not least, are the environmental issues. Indeed, these may be the driving force behind the move towards the reservoir. Building the reservoir itself inevitably causes some environmental damage, if only in the fuel used. But there are great opportunities to benefit the environment, for example, avoiding damaging abstraction at times of low-flow, constructing wetlands and landscaping around the reservoir and providing nesting sites for birds. It is important that these are included in any public debate and by planning committees.

So, lots to consider. For some farms, a reservoir clearly is the right option, and sometimes the only option. For others, alternatives may exist, perhaps through trading licences, renting land with a more reliable water supply, changing crops or even moving to another catchment entirely.

• A reservoir can secure your future water needs

• Siting is crucial, so time spent planning is time well spent

• Think about sharing a reservoir – it can attract grant funding

• Put the environmental issues at the centre of your planning – they are no longer a “bolt-on”

Farm reservoirs – part of a new water resources strategy

Following a period of consultation, the Environment Agency is developing a new water resources strategy – Water for people and the environment – for publication in December 2008. They are promoting a “twin-track” approach that will encourage farmers to consider on-farm storage in order to secure future water supplies.

To this end, the Environment Agency has recently published a booklet – Thinking about an irrigation reservoir – to guide farmers through the maze of planning, design, construction and operation. It is available from the UK Irrigation Association website www.ukia.org

Building a reservoir - what does it cost?

This is probably the question that is uppermost in most farmers’ minds

The cost of constructing a reservoir, apart from how much water you want to store, largely depends on its location and the soil type. These determine if you need to use a synthetic liner, if you must comply with the Reservoirs Act 1975 and whether you will face environmental and planning restrictions. Recent experiences have shown that you could spend up to £75,000 on obtaining planning permission, getting an abstraction licence, reservoir design and environmental and archaeological surveys before you are able to start work.

Lined or unlined?

Constructing a reservoir on clay is the cheapest option. Typical earthworks cost between £1.00-£1.25 per cubic metre of gross storage capacity. There are some economies of scale so average costs may be slightly lower for larger reservoirs.

Earthworks costs are sensitive to fuel prices, which have risen almost 40 per cent in the last 12 months and increased earthworks costs by 25 per cent. Contractors are now likely to insist on a sliding scale of charges to allow for changes in fuel prices.

Table 1 shows typical average costs for a 45,500m3 (10 million gallon) synthetic-lined reservoir based on recent reservoir investment projects across the UK.

A synthetic liner will add about 40 per cent to the total cost. Liners generally have only a 20-year lifespan and so this will need to be factored into any financial assessment. Liners too are increasing in price because of increasing oil prices.

Underground mains, hydrants, valves and bends and pumps will all add to the cost depending on the scale of the system. An electricity supply will typically cost around £1.00 per cubic metre for the lines, transformer and control gear.

Landscaping and fencing are on-costs that are often overlooked. Together they add about £0.11 per cubic metre but depend on area landscaped and fenced.

Set-up costs

In addition to the costs of obtaining the various permissions, there are the costs of site investigation, design and supervision, which can add about 15 per cent to the overall costs of construction. Environmental impact assessments (EIA) may cost around £10,000 and a full archaeological survey can be very expensive on contentious sites – as much as £70,000 as highlighted at a recent UKIA conference.

Recurrent costs

Although capital costs are always the main focus of attention, it is important not to neglect the year-on-year costs of operating and maintaining a reservoir. Annual repair and maintenance costs for a clay reservoir will be about 1 per cent of the overall capital costs of the reservoir and ancillary works.

For reservoirs that come within the 1975 Reservoirs Act, inspection fees can be up to £5,000 over a ten-year period.

Energy costs will rise because you will need to pump water twice, but there are some small savings if off-peak electricity can be used and from the lower water abstraction charges for winter abstraction (currently 10 per cent of the summer rate).

Funding opportunities

The new Rural Development Programme for England (RDPE), which runs from 2008 to 2013, has allocated funds for water resource management projects and in particular water storage reservoirs and water catchment and recycling projects. This will be administered by the regional development agencies (RDAs). Most have set a maximum grant rate of 40 per cent for reservoirs, which equates to a grant of £100,000 on a £250,000 reservoir investment. So, for more information, get in touch with your local RDA.

  •  A 45,500m3 clay reservoir will cost about £150,000. A synthetic liner will increase this by about £90,000
  •  Getting permissions can cost as much as £75,000 before you start construction
  •  Include recurrent costs in your plan and not just capital costs
  •  Grants are available for reservoirs so investigate the funding rules

Table 1: Typical costs for a 45,500m3 lined reservoir