(1) Any other applicant, or any user of water from any river system or water source may file a request for agency action with the state engineer alleging that such work is not being diligently prosecuted to completion.
(2) Upon receipt of the request for agency action, the state engineer shall give the applicant notice and hold an adjudicative proceeding.
(3) If diligence is not shown by the applicant, the state engineer may declare the application and all rights under it forfeited.