I am looking at a job that will be going down in a few weeks. The engineer wants to run the main service entrance pipes underground and right through a major drainage catch basin between 2 buildings. Is there anything in the code that says it could or could not be allowed? In the 2002 NEC or the 2005 NEC? I am already starting to have problems with a too small electrical room. We shall have to go head to head on some of these issues. Thank you.

Once something is "wet location" I don't think it can be wetter. (a "double secret wet location"?)
You should think of physical damage problems which become very serious when it is a service lateral.
Can they put it at the bottom and cover it with concrete?

Greg,

Those were several issues I had with this application. The "Wet" location and the damage that can be done if they ever decide to dredge out the area or dig it deeper. I guess I can make them encase the service laterals in concrete. The main reason is that if the pipes leak, they could flood out a CT cabinet. I have seen this happen before. The bottom fell out of a CT cabinet due to water damage.

Underground pipes are expected to have water in them, Arranging your equipment to keep the water out is another issue. I do see your point though, if your CT can is lower than the expected "high tide" in the catch basin. All the more a reason to bury them in concrete or just stay out of the basin. You could be expected to deal with a little condensation but you shouldn't have to worry about draining the whole street through your equipment if you had a "rust through".

Greg,

I guess I could also ask for a letter from the EE stating that in his opinion, it is safe to install it this way. That way in case something does go wrong, I can have it on record that he could be responsable for it.

Make sure he understands and addresses all of your concerns. The engineer may not have thought of all the bad things you have seen in your career.
He may think nobody ever digs and conduit lasts forever. Maybe he needs to see a catastrophic failure of a service conductor.
At a certain point you are still the AHJ and the buck stops on your desk. As my boss used to tell me when I was inspecting "make it safe".