(1)  The Minister may, by order published in the Gazette , declare a specified part of a watercourse to be a water supply channel for a specified water supply district or irrigation district.

(1AA)  The order is not a statutory rule.

(1A)  The declaration of a water supply channel may be made subject to any conditions that the Minister thinks fit to further the objectives of this Act.

(2)  On the making of the order, the specified part of a watercourse is taken to be a water supply district or irrigation district, as the case may be.

(3)  If the declaration relates to a watercourse in a hydro-electric district, it may be made only with the agreement of the relevant electricity entity which agreement –

(a) may not be unreasonably withheld; and

(b) may be subject to reasonable conditions imposed by the electricity entity.

(4)  If the agreement is subject to any such conditions, the Minister must include those conditions in the order made under subsection (1) .

(5)  The order may provide that any authorisation, or any water allocation of a licence, under which water may be taken out of the specified part of the watercourse –

(a) ceases to have effect and, if the Minister so directs, is to be replaced by arrangements for the supply of water by a water entity; or

(b) continues to have effect but subject to such conditions as the Minister may specify –

but, if it is proposed to make such an order, the Minister must publish notification of his or her intention to do so in the Gazette and in a local newspaper, inviting any persons who would be affected by the order to make representations, within a period of 14 days, as to why the order should not be made.

(5A)  If subsection (5)(a) applies to the order, the Minister may further direct, by the same order, that any registered financial interests in the relevant authorisation, or the relevant water allocation, are to attach to the irrigation right.

(6)  A right to take water which ceases to have effect under subsection (5) is to be converted into a claim for compensation to be paid by the relevant water entity and to be determined as if it were a disputed claim for compensation under the Land Acquisition Act 1993 .

(7)  The Minister must not make an order under this section if it would be inconsistent with any relevant water management plan.

(8)  Where part of a watercourse has become a water supply channel –

(a) the water entity responsible for the channel must –

(i) receive into it all water flowing into it from the upper part of the watercourse or from side watercourses; or

(ii) divert that water into the lower part of the watercourse or another watercourse by appropriate works; and

(b) the flow of water out of the channel into the lower part of the watercourse, so far as it does not exceed the flow into the channel from the upper part of the watercourse and side watercourses, if any, is taken to be the natural flow of the watercourse.

(9)  Where, in place of a right affected by subsection (6)  –

(a) the Minister grants an authorisation to take water under this Act; or

(b) a water entity grants an irrigation right or domestic purposes right under the Irrigation Clauses Act 1973  –

the value of the replacement authorisation or right is to be taken into account in assessing the amount of any compensation under that subsection.