It does (or maybe partly) complete the quest the prisoner (Rafe?) gives you. To get there, you need to enter the tunnel that leads to the spa/bath area (this is all behind the area where you prisoner meet the prisoner, behind an iron grate/door). You get there by going a long way around. Just after crossing the bridge (between the area where there are three prisoners and the area where there are four long corridors and you encounter a lot of priestesses or concubines?), instead of going into the temple-like building, turn left and go down the hill. This will put you behind the iron grate/door you could not get passed.Here you find the tunnel that leads to the spa/bath area. You need to cause a couple cave ins here, to get across the lava tube .. you should be able to find your way after that (involves a teleporter or two).
Tools for Wizardry(r) 7