As part of the construction of the Melbourne Underground Rail Loop it was necessary to construct two 7 metre diameter tunnels, each 100 metres in length, by shield driven excavation through an alluvial valley at Elizabeth Street. The tunnels had a primary support of bolted precast reinforced concrete liner blocks and were excavated with the aid of compressed air. The work was undertaken by the Tunnelling Group of the Melbourne and Metropolitan Board of Works as nominated sub-contractor to John Holland (Constructions) Pty. Ltd. The paper describes some of the problems associated with the construction of the above tunnels and the methods used to overcome them. In particular