Several projects are also under way in tender or planning stages, including the North-West Rail Link tunnel and the “missing” road tunnel projects (the M4 East, M5 East and M2–F3) in Sydney, the East-West Link and Melbourne Metro projects in Melbourne and the Cross-River Rail project in Brisbane.1 In addition, a number of mining companies are investing in major underground projects using shaft and tunnel technologies.2

Tunnelling is not an exact science. It is a higher risk engineering project requiring advanced technology to deal with a range of challenging engineering and safe work issues. It is dependent on the geology (with its unique combination of soil and rock conditions, fault zones and permeability of the ground), the groundwater conditions (whether there is ground-water leakage and high pressure inflow), the type of tunnelling equipment (e.g., TBMs versus shielded machines) and method used (e.g., serial tunnelling versus continuous tunnelling), the size and diameter of the tunnels, etc.3

Most contractors generally provide for work contingencies for tunnelling work (in some cases, 8–12% of the estimated overall costs) and insurers also seek higher risk premiums for tunnelling projects.

This type of higher risk project requires an integrated approach towards risk management. Owners and contractors must understand and appreciate