International demand for skilled workers is adding to the pressures faced by two of the country's biggest infrastructure projects.

The problem was outlined in a report to Watercare's board, which said a shortage of skilled workers on projects like Auckland's $1.2 billion Central Interceptor is being driven by Covid-19 travel restrictions and competition from Australian companies.

According to Watercare chief executive Jon Lamonte, other projects in the city, including the City Rail Link, are facing the same problems.

The Central Interceptor is a 14.7km long sewer tunnel from Grey Lynn to the Mangere Wastewater Treatment Plant. Work on the project started in 2019 and is expected to be completed in 2025.

It is being constructed by Ghella Abergeldie Joint Venture and is expected to reduce sewage overflows into the Waitemata Harbour.

Watercare chief infrastructure officer Steve Webster said Covid-19 has not only made immigration and international travel more difficult, but it has also led to more countries investing in infrastructure to boost their economies.

"This means there is greater competition for engineers, project managers and skilled construction workers around the globe," Webster said.

"On top of this, the cost of living in Auckland is a challenge. There is a noticeable drift to Australia in the construction industry, where wages are higher and the cost of living is often more favourable."

City Rail Link chief executive Dr Sean Sweeney says there are sector-wide shortages for jobs ranging from engineers and skilled technicians, through to general trades like steel fixers and welders

City Rail Link chief executive Dr Sean Sweeney says there are sector-wide shortages for jobs ranging from engineers and skilled technicians, through to general trades like steel fixers and welders Photo: STUFF/ Ryan Anderson

City Rail Link chief executive Sean Sweeney echoed Webster's concerns.

The $4.4b rail tunnel project employs about 2000 workers and has required people from overseas with specialist skills not available in New Zealand.

Sweeney said this includes workers to operate and maintain the project's tunnel boring machine, as well as those with experience in tunnel construction.

He said there are sector-wide shortages, ranging from engineers and skilled technicians through to general tradespeople like steel fixers and welders.

Sweeney said the sheer complexity of the project meant it was always going to be heavily reliant on international expertise, but Covid-19 and its impact on immigration has complicated matters.

"One of the biggest challenges facing CRL and other projects is getting skilled international workers to New Zealand - passing through other countries managing the Covid pandemic and finding a seat on the greatly reduced number of planes flying to this country."

He said the project's main contractor, the Link Alliance, has now introduced on-site training for New Zealand-based workers to fill some of the skills gaps.

Wellington-based economist Cameron Bagrie said while Covid-19 border restrictions have made it harder for industries to access people with the right skills, the shortages aren't solely due to the pandemic.

"Some of these issues are being blamed on Covid-19, but they are much deeper than that," Bagrie said.

"We have underinvested in the training and education of our people for a very long time. What shutting the border has done is expose that underinvestment."

Bagrie said New Zealand employers don't always offer the best pay and conditions, adding to the problem.

Minister of Infrastructure Grant Robertson said the Government in May announced 300 places in managed isolation between June and October for specialised construction workers.

"As part of our response to Covid-19, we also launched a comprehensive support package for apprentices and their employers, assuring job security for existing apprentices and creating openings for new ones.

"We are committed to supporting the sector through continued investment in trades training and apprenticeships."