I have searched the local library to get more details without much luck. A phone call to a long-time council employee confirmed the tunnel had been built for the council in the 1960's by the HEC who had the skills and equipment. This tunnel carries the sewerage pipeline from West Launceston into the city towards a treatment plant. Unfortunately the tunnel is gated although you can peer in through the grill work. I think a walk through here should be part of the tourist walks in the Cataract Gorge area. The majority of the tunnel is about 60m below ground level.
There is a fairly good track but its start is sort of hidden behind the sign post at waypoint S 41 26 718 E 147 07.252 which gives directions to other things in the area.
The cache is a light blue 200ml sistema containing a pencil, logbook and some small swaps.