Major geotechnical issues related with tunnel construction phases are addressed. Focusing on an excavation scenario with reinforced concrete retaining walls in prevailing clayey soils, locally including sandy and silty-sandy layers, this study explores both drained and undrained conditions and considers various boundary conditions. Using the Finite Element (FE) method, a construction stage analysis of a tunnel located in the alluvial deposits of the Po Plain (northern Italy) in an urban area is carried out. This tunnel will serve the burying works of the Ferrara-Codigoro railway line, which are still underway. Based on hydrogeological conditions, the developed models take alternatively account of: (1) drained conditions with horizontal water table; (2) drained conditions with sloping water table (due to differences in water table depth between tunnel location and surrounding territories), and (3) undrained conditions with horizontal water table. Further complexity is introduced by incorporating buildings with either rigid or deformable foundations into the FE model. The fundamental role played by the boundary conditions is emphasized. Therefore, a detailed understanding of the exact sequence of construction phases and a good knowledge of the subsoil hydrogeological conditions result to be of utmost importance to capture induced settlements.