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There iB much more rolling stock on the line than was estimated for, but the greater traffic of the district has rendered the increase necessary. Meeceb to Newcastle. The first 10 miles are being done by contract, and fair progress has been made. The bridge work, which is also being done by contract, is well advanced. The remaining 20 miles have been nearly finished by the Engineer Volunteer Militia. This force is now disbanded, and the completion of the work will be let by contract. Rails will be conveyed by steamer to Taupiri, where a wharf has been built, and platelaying will be very shortly begun. The only ballast obtainable is at Taupiri, and the line will be ballasted in both directions from that place. At the same time, in order to hasten the work as much as possible, platelaying will be carried on from the Mercer end as soon as the tunnel and heavy cuttings at Mercer are through. The line from Mercer to the north bank of the Waikato at Newcastle may be expected to be open by April next. Newcastle Southwaeds. The bridge over the Waikato consists of three spans of 120 feet, and a land span of 30 feet; it is in course of erection, and will be completed in March next. The earthwork and culverts are finished for 10 miles, and the rest of the distance to Ohaupo is in hand. This work has been done by the Engineer Militia. From Newcastle to Hamilton the line may be ready for traffic by May next. The direction of the line beyond Ohaupo will depend on whether the Waikato or Waipa Valley will be followed. For 30 miles on the Waipa line there would be very little work, but beyond that is almost unknown country, which for the present, at least, cannot be explored. Waitaea to New Plymouth. This line should have been opened on Ist April last, but the unexpected necessity of importing all the timber required for sleepers and bridges has caused delay. It will probably be opened by the end of September. New Plymouth to Patea. The surveys for the first section of 13 miles 40 chains are completed. An appropriation on account was taken for this line, which will be sufficient for 6 miles only. Patea to Wanganui. The first section from Wanganui of 85 miles has been let. An appropriation of £50,000 on account was granted. This will not be sufficient to complete the first section, which will cost £60,500. Wanganui to Manawatu. The bridge over the Wanganui River, and 20 miles of the line, are under contract from the northern end. From the southern end 14 miles are in course of construction. The intervening sections, including a gap of 5 miles, for which no appropriation has been made, are ready to let at once. The formation of the first contract from the northern end, about 10 miles in length, is completed for 6 miles, the remaining 4 being far advanced. An engine is being erected, and platelaying will begin as soon as it it ready. The next section is also well advanced, so that it will be ready for platelaying by the time the engine can run over the first length. From the southern end platelaying has been begun, but the wet weather has almost put a stop to work for the present. A bridge, consisting of 5 spans of 40 and one span of 162 feet, suitable for both road and railway, has been completed across the Manawatu River at the Gorge. The length from the Wanganui River to Turakina is expected to be ready for traffic by April, 1876, and from Palmerston to Feilding by the end of this year. • Napieb to Waipukubau. Nineteen miles are now opened for traffic, and the rest of the work is well advanced. The most important works are the bridges across the Waipawa and Tukituki Rivers. They will be delayed on account of a ship-load of timber imported for them having been condemned. The cost of this line will exceed the estimates by £20,400, or 9P2 per cent.; this is due to a general rise in prices, especially in timber and bridge work. The cost of the latter will exceed £44,000, for which only £27,500 was provided in the estimates. The latter were framed on the supposition that small-span bridges would be sufficient, but it is neither desirable nor safe to use very short spans for the New Zealand shingle-bearing rivers, and the original plans have been modified by using spans of 60 feet, which are more expensive. Iron has also been used for the lower booms, at an increase of cost, but with a more than corresponding increase of efficiency. The New Zealand timbers are all so short in ,the grain, that I have avoided as much as much as possible using them, where they would be subjected to a tensile strain, as in the lower booms of bridges. The line from Pakipaki to Te Aute may be expected to be open for traffic in November, from Te Aute to Waipukurau in January, and from Waipukurau to Takapau in March next. Wellington to Masteeton. Fourteen miles are now completed and opened, but, as there would be no traffic on the last section of 6 miles until the bridge across the Hutt is finished, trains are not at present run over it. The bridge is nearly completed, and has been very creditably done by the contractor, Mr. McKirdy.

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