Vietnamese rescue workers frantically pumped oxygen into a collapsed tunnel to sustain 12 people trapped underground as water threatened flood the area, a report said Wednesday.

All 12 people are still alive two days after a tunnel at hydropower plant in the central highlands collapsed, but the situation remains "urgent" with water levels rising, construction minister Trinh Dinh Dung said in comments posted on the VNExpress news site.

The collapse at the tunnel -- part of the Da Dang-Da Chomo hydroelectric power plant development in Lac Duong district of the Central Highlands -- happened early Tuesday after heavy rain in the area.

Rescuers are trying to find ways to "pump the water out... and are digging a tunnel to bring the people out," Dung said, adding oxygen and food had been passed to the trapped men via a tiny hole made by the rescuers.

Hundreds of rescue workers and soldiers have been mobilised as part of a major drive to free the workers.

Vietnam draws more than one-third of its electricity from hydropower.

Fatal collapses and rockslides are reasonably common at illegal stone quarries and mines in Vietnam due to lax regulations and safety standards.

But there have been few fatal incidents at the country's many hydroelectric power plants.