Tunnel construction involves complex projects that encompass various types of risk. These risks can influence the project in different situation. It is important to gain deep understanding of the risks associated with tunneling in order to reduce the likelihood of their occurrence and severity of their consequence should they occur. For this to be achieved, different risk should first be evaluated and ranked according their risk level.rnTo achieve project goals, it is necessary to adopt appropriate risk management strategies from project inception to project completion. Risks can be managed in different ways directly or indirectly using engineering decisions, but at this time improving systematic and well organized risk management techniques are important.rnThis paper studies about the current tunnel practices in Ethiopia, the main challenges and risks which were associated with tunneling, risk assessment and controlling measures. In doing so risk factors causing delay, increasing total cost, degrading quality, and decreasing the operation rate were also identified and ranked based on their impact and occurrence using risk matrix method. For this purpose questioner designed and completed by tunneling experts. By responding to the questioner the experts determined the likelihood and impact of the risks. As a result the tunneling experts suggested the alternative response method for controlling risks.rnAs result of performing the qualitative analysis it is concluded that risk matrix is an effective tool in identifying, ranking the risks involved in such project. It was also concluded that by taking into account different alternatives when analyzing and ranking risk its impact can be reduced and the projects efficiency also increased.rnGuideline is then prepared in order to give guidance for all of these who have the job of preparing the overall scheme for the identification and management of risks in tunneling and underground projects in Ethiopia. The guideline can help for those futures planned tunneling projects in Ethiopia. This provides owners, contractors and consultants with what is modern-day industry practice for risk assessment, and describes the stages of risk management throughout the entire project implementation.