EIC director Merlin Hyman said the current system creates “a boom and bust financial climate” for water industry contractors as capital expenditure tends to be concentrated towards the end of the five-year period.
Mr Hyman said the government should change this and increase the company’s present water investment programmes from five years to twenty years.
He added: “This situation leads to financial managerial inefficiencies and instabilities in the supply chain, resulting in a skills shortage and ultimately to higher costs for consumers.”
The group is also calling on the government to stagger investment programmes within the water industry so that all the water companies in England and Wales.
Water companies in England and Wales have just announced their draft investment plans for AMP 5, which runs from 2010 to 2015.