South East Water has announced West Street in Farnham will remain closed for at least another six weeks, until the end of May.
The road, currently closed between Crosby Way and the Coxbridge roundabout, had been scheduled to reopen in late April.
But South East Water says its £1.3 million water network upgrade project has encountered several engineering difficulties, particularly heavy utility congestion beneath the road surface.
Jeremy Dufour, the project manager for South East Water, said the construction team has been working "incredibly hard to install approximately 800 metres of pipe within West Street".
However, with approximately 400 meters of pipe left to install, he said the initial target of completing works by the end of April is "no longer achievable".
Despite working additional hours, including over the recent bank holiday weekend, to install as much water pipe as possible, progress has been slow because of the utility congestion.
Mr Dufour stated the utility congestion is expected to ease once the team progresses beyond The Chantrys and can lay pipe much faster than the current installation rate.
Following discussions between South East Water and Surrey County Council's highways team, it has been agreed that the work in West Street will now continue until the end of May.
"West Street will remain closed to passing traffic during this time and, of course, we will work as quickly and safely as possible to shorten our timetable," Mr Dufour continued.
Although this delay in the first phase of the project may cause some disruption, Mr Dufour has assured the public that it will not significantly impact the next two sections of the project.
But he said deploying an additional construction team, as some have requested, is not currently productive because of the amount of utility congestion in West Street.
The closure of West Street has had a severe impact on many businesses in the area, including Farnham Tandoori which says its takeaway businesses is now "almost non-existent" approaching three months after the road was first closed on January 23.
Farnham Tandoori at 47 West Street is open seven days a week for dinner and on Thursdays for lunch. Call 01252 716853 to book a table or order takeaway, or visit the restaurant's Facebook page for a menu.
Jeremy Dufour, South East Water project manager's statement to community stakeholders in full: "Our construction team is continuing to work incredibly hard to install approximately 800 metres of pipe within West Street as part of our £1.3 million water network upgrade project.
"Unfortunately, the team has faced a host of engineering difficulties – mainly heavy utility congestion beneath the road surface – which has slowed their progress.
"With approximately 400 metres of pipe left to install, our initial target of completing works in West Street by the end of April is no longer achievable.
"This is despite working additional hours, including over the recent bank holiday weekend, to install as much water pipe as possible.
"We are confident the utility congestion will ease once we progress beyond The Chantrys and the team will be able to lay pipe much faster than the current installation rate.
"Following discussion with the local Highways team today (Friday 14 April), it has been agreed our work in West Street will now continue until the end of May.
"West Street will remain closed to passing traffic during this time and, of course, we will work as quickly and safely as possible to shorten our timetable.
"Although this section of our three-phase project is delayed, it does not have a significant impact on the next two sections – within private land, along Runwick Lane and on the A31.
"Due to the amount of utility congestion, deploying an additional construction team would not currently be productive. An extra team installing pipe would essentially block small pockets of homes and businesses in as we would not be able to safely let vehicles past the working area.
"Our priority, as always, is installing the pipe in a safe and efficient manner while balancing the level of disruption to local residents and maintaining access to vital local businesses.
"We’re incredibly sorry for the additional disruption the extension to our working time may cause and we’re grateful to the local community for their continued patience during this vital work."