Two of Auckland’s largest infrastructure projects face significant cost increases and delays due to global skills shortages and the impact of Covid-19.
The Central Interceptor is a 14.7 km long sewer tunnel from Gray Lynn to the Māngere Wastewater Treatment Plant. It is expected to reduce sewage overflows at Waitematā port.
Work on the $ 1.2 billion Watercare project began in 2019 and was expected to be completed in 2025. Work is being carried out by the Ghella Abergeldie Joint Venture.
But according to a report to Watercare’s board of directors, hiring and retaining business-critical staff “is becoming more challenging and now presents a critical risk to the project.”
There are concerns about the potential impact such a shortage of workers could have on the project’s labor costs, as well as the expected completion date.
“The Covid-19 restrictions will further delay the completion of all sections of the project. The overall contract completion is now expected to be in the first quarter of 2026,” according to the report.
Watercare Central Interceptor Executive Program Director Shayne Cunis said the pandemic had created challenges for the project and that getting the right people for the job was not easy.
“There is a skills shortage in the construction industry in New Zealand, which makes filling vacancies challenging as we ramp up construction,” he said.
“We also face stiff competition from our Australian neighbors when it comes to attracting and retaining staff, with the lure of higher wages in the construction industry and fewer restrictions.”
Cunis said MIQ could complicate matters, particularly with foreign workers who want to visit relatives abroad.
But despite the project deadline being postponed, he was confident that it could still be delivered on budget.
Across town, City Rail Link (CRL) faces similar challenges.
The $ 4.4 billion rail tunnel project employs about 2,000 workers and has required people from abroad with specialized skills not available in New Zealand.
City Rail Link CEO Dr. Sean Sweeney said he faced challenges in recruiting and retaining specialist staff across the board, and that Covid-19 had made it difficult to recruit the right people.
He said the types of workers he needed ranged from steel repairers, block layers and mechanics to crane drivers, electricians and engineers.
“This shortage appears to have been exacerbated by current closed borders and immigration cuts over which CRL has no control.”
Sweeney said the shortage would increase both the cost and time to complete the project, but could not say at this stage by how much.
Wellington economist Cameron Bagrie said governments around the world were pouring money into infrastructure, and that meant there was more competition for the right people with the right skills.
“We are looking at the skills shortage across the board.”
Bagrie said that added to global supply chain pressures that were reducing access to building materials.
“The cost of infrastructure projects is skyrocketing and many are looking for double-digit cost increases,” he said.
“We are facing an extended period of supply disruption, and some of it is beyond our control. But in some cases we have to improve our game.
“The bottom line for many of these projects is that they have significant supply constraints and the cost of them will only increase.”
Local Democracy Reporting is a public interest news service supported by RNZ, the Association of News Publishers, and NZ On Air.