This paper presents the geological conditions encountered at the site of the proposedKusan-3 hydropower project located in South Kalimantan, Indonesia and their influence on the tender design of the 100 m high gravity dam. The rock types identified during investigation of the dam foundation are pyroxenite, serpentinite, peridotite and diorite. Serpentinite, which extends over nearly 30% of the dam base, is well known to be a questionable foundation material. On the basis of this qualitativeassessment, attention was focused primarily on theserpentinite. Both laboratory and in situ field tests were carried out on the serpentinite. An estimate of the shear strength and the deformability of the rock mass were developed from the laboratory data, taking scale effects and discontinuity characteristics into account. In addition, applying the Geological Strength Index system to quantify the physical parameters of the serpentinite provided satisfactory confirmation of the selected values. The layout and the design of the dam have been developed for the derived rock mass properties and adapted to accommodate the complex, but optimum arrangement of the diversion works, the spillway and the power intake. It is concluded that the proposed Kusan-3 RCC dam can be safely constructed on the serpentinite and on the other crystalline rocks at the site.