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The scheme is due for completion in 2010 and is expected to greatly enhance transport links in the region.
Mr Dempsey said all indications suggested the tunnel would be completed on time and within budget.
He reaffirmed the state's commitment to infrastructure investment despite the economic downturn.
"We know that this investment will pay dividends now and into the future. When complete this tunnel will have the capacity to take approximately 40,000 vehicles out of Limerick city centre. This will help to ease congestion and facilitate business," said the minister.
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The Limerick Tunnel is part of the final phase of the Limerick Southern Ring Road, which is covered under Governments Transport 21.
It is expected to eliminate traffic congestion in the city centre, improve air quality, lower CO2 emissions, and allow for further pedestrianisation of the area, and bus corridors.
It is estimated that during rush hour traffic - along the dock road in Limerick - can add an additional half hour to forty minutes to their commute. This tunnel project will remove that bottleneck.
This phase starts at the Rossbrien Roundabout on the N7 and continues westward along six kilometres of dual-lane dual-carriage way crossing Greenfields Road, St. Nessans Road, the Dock Road and Bunlicky Lake before diving under the Shannon through a 915m tunnel and emerging at Coonagh.
The route continues North West for another 4 km before connecting with the N18 to Ennis or travelling North East along the Clonmacken Link to the Clonmacken Roundabout. The road also includes 11 bridges, six underpasses and two toll plazas for the collection of tolls.
Each tunnel element is approximately the length of a football pitch (100m), as high as a two storey house (8.5m), wide enough for two lanes of traffic in each direction (25m) and weighs in at 20,000 tonnes, giving a staggering combined weight of 100,000 tonnes.
(PR/JM)
