Elevation (Z value) data is not applied after importing a GIS file (SHP, MIF/MID, or TAB) and defining the configuration variable MS_ELEVPROP_AS_Z.
Reason 1: GIS files are imported with the elevation data available at the time of importing.
Elements are imported with the elevation (Z value) applied if the configuration variable MS_ELEVPROP_AS_Z is set before to importing the GIS file.
Reason 2: Configuration variable definition is case-sensitive
Make sure value defined for the configuration variable MS_ELEVPROP_AS_Z matches the capitalization of the value used to define the attribute in the GIS file.
MicroStation Wiki - GIS Files: Open, Import and ReferenceMicroStation Wiki - GIS Files: Unable to Open, Import or ReferenceMicroStation Wiki - GIS Files: Elevation DataMicroStation Help - Using GIS Files