During underground construction, the behavior of the ground is influenced by characteristics of the rock mass with situ stresses and ground water, cross section of the excavation area, excavation method, and the rate of excavation. These fundamental features are considered to ensure the support and stability of underground excavations and achieve long-term successful operation. However, the ground composition of the Himalayas hinders tunnel excavation, especially in case of mechanized tunneling; this causes time and cost overruns. This study has reviewed the recently completed Neelum–Jhelum Hydroelectric Project; the project complexities, geological environments involving significant overburden and tectonic stresses, and effects of the excavation method on tunnel stability were analyzed. The major challenges that were encountered during construction are discussed herein along with their countermeasures. An analysis of project-related data reveals that latest techniques and approaches considering rock mechanics were used to complete the project; the existing approaches and methods were accordingly verified and extended. Apart from ground composition, the excavation methods used play an important role in the occurrence of severe rock bursts. Thus, the findings of this study are expected to be helpful for future tunneling projects in the Himalayas.