The Big Wainihinihi River and tunnel are located on the western side of the Southern Alps of New Zealand within the active Alpine Fault zone, which marks the boundary between the Pacific and Australian Tectonic Plates. The tunnel was built over 100 years ago to supply water for gold mining, but it now conveys water from a high-energy intake to a canal that supplies three of TrustPower's hydro-electric power stations with a combined installed generating capacity of 10 MW. Part of the tunnel passes through an unstable 50 schist slope, which fi rst suffered a wedge failure in the 1929 Arthur's Pass Earthquake and was reinstated in the mid-1970s for hydro generation. In 2008, TrustPower's monitoring system showed that the wedge failure had remobilised and that urgent remediation was required.Harker Underground Construction (Harker) was awarded a design-build contract to restore the tunnel to service by tunnelling a new central section. Their geotechnical engineers, Peters and Cheung, reviewed the tunnel's stability and proposed a new, safer tunnel alignment, deep behind the failure wedges. This work was based on their failure model, cost-benefit studies, and engineering geology completion mapping at the time of re-opening.Construction innovation was an important factor in ensuring the project's success, as were detailed geological and geotechnical information, a robust methodology, strong client relationship and planning. To suit the varying rock conditions and restricted space, Harker combined a traditional drill-and-blast method with light-weight modular steel sets and timber supports to reduce construction costs and mitigate support risk. To make material handing easier in the tight conditions, a special electric locomotive was designed and built and blasting confi gurations were adapted to suit varying rock conditions in the highly fractured schist.The isolated site meant interesting and unexpected challenges, particularly communications and resources (both human and material). Despite that, the project was completed within budget, on schedule, and with no lost-time injuries.