The Poatina hydro-electric scheme conveys water from Great Lake in central Tasmania through a headrace tunnel, a surface steel penstock and a vertical shaft to the underground Poatina power station. Water from the power station is discharged through a tailrace tunnel and canal into the Macquarie River. The scheme was constructed in the early 1960s and the power station was commissioned in 1964. A continuing problem with silt in the tailbay of the power station suggested that groundwater was leaking into the tunnel. Tunnel inspections indicated that this leakage was from a section at the downstream end of the headrace which had been concrete lined through heavily faulted ground. It seemed likely that the loss of silt from this faulted ground could lead to a collapse of rock within the fault and consequent failure of the concrete lining and major leakage into the surrounding countryside. This paper describes the investigations that have been carried out to determine the condition of the headrace tunnel and the repair work that has been carried out.