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Enclosure No. 2 in Appendix "D. WESTLAND DISTRICT—ANNUAL REPORT ON WATER-RACES. The District Engineer, Hokitika, to the Engineer in Charge, Middle Island. Sir,— District Engineer's Office, Hokitika, 31st May, 1878. I have the honor to report that the water-races in this district, with which the General Government have been connected during the year just ended, have been as per list below : —• Nelson South-West Gold Fields— Four-Mile Water-race —Charleston District. Nelson Creek Water-race —Grey Valley District. Westland Gold FieldsNew River Water-race —Marsden District. Hibernian Water-race —Marsden District. Hohonu Water-race —Greenstone District. Waimea Water-race —Waimea District. Waimea Extension to Kumara —Waimea and Kuinara Districts. Kanieri Lake Water-race —Kanieri District. Mikonui Water-race —Totara District. Pour-mile Water-race (Proposed). —Length, 8 miles; capacity, 15 statute heads. Estimate, including probable cost of increasing capacity of Argyle Company's reservoir, £13,400. This project was fully described in annual report furnished last year. A vote of £14,000 was taken for it in the appropriations of 1877, but no instructions have been received relative to commencing the works. It is doubtful if it would be remunerative, and the inhabitants of the locality do not seem to be very eager for it. Nelson Creek Water-race. —This work as constructed consists of 16 miles 24 chains of main race, capacity 00 statute heads, with reservoir and headworks at Lake Hochstetter, and 1 mile 57 chains main branch race, capacity also 60 statute heads, together with a race known as " Magee's Eaco," purchased by the Government, and minor branch races, waste-water channels, and foot-tracks. The construction of the main race and main branch race, comprising a total length of 18 miles 1 chain, involved exceptionally heavy work, consisting of 10 miles 2 chains of ditching, 6 miles 39 chains of tunnelling—almost the whole of which is lined with timber —and 1 mile 40 chains of fluming, including five bridges, varying in span from 100 to 150 feet, and standing from 70 to 170 feet above the levels of the creeks which they cross. Some of these structures would be looked upon as works of magnitude in any country ; and when the precipitous nature of the country in which they have been carried out is taken into account, the use of horses being in most cases impossible, and the greater portion of the timber used having been drawn or carried on men's backs to the site of the works, it redounds greatly to the credit of the contractors (Messrs. Garven and Price) that they succeeded in bringing their undertaking to a workmanlike and satisfactory completion. The work done during the year just ended has consisted of 17 chains of fluming and 100 chains of boxing on flumes, with by-washes, waste-water channels, and minor branch races, &c, to the extent in all of £22,500 ; and the average number of men engaged on the construction works throughout the year has been 66. In the month of August, 1877, the works were sufficiently advanced to admit of sales of water being commenced, but, as is always the case with new water-races, it took the miners a considerable time to open out their claims, so as to utilize the water to the best advantage, and it was not till February of this year that any considerable revenue has accrued to the Government. Since that time, the revenue has been as follows :— February, 1878 ... ... ... ... ... £146 10 0 March, 1878 ... ... ... ... ... £159 13 9 April, 1878 ... ... ... ... ... £205 0 0 The whole of the works at present contemplated in connection with this race are now completed, with the exception of some additions to by-washes at headworks, estimated to cost about £2,000, which are in progress by day labour; and a telegraph line from Manager's office, at Hatter's Terrace, to headworks, which is included in estimates forwarded for next year's works, and which it would be very desirable to have carried out. As the gold workings in connection with this race are now in full operation, and as they will probably in a short time materially affect the level of the creek-bed for some distance below end of race, and thereby possibly give rise to litigation between the miners and the freehold and leasehold owners lower down, some litigation of the sort having already arisen, it has become a question as to whether it would not be well to proclaim the streams likely to be affected as sludge-channels, under " The Gold Fields Act Amendment Act, 1875 (No. 1)." This question is, however, fully gone into in report to Engineer-iu-Chief dated 18th March last. For the year ending 31st May, 1879, the maintenance, including working expenses, of this race, is estimated at £2,500, and the revenue at £3,000; but, as some allowance has been made in estimate of revenue for possible stoppage of works in consequence of complications with freehold and leasehold owners, it is probable that, if the streams likely to be affected were proclaimed under Gold Fields Act above cited, the revenue would exceed the estimate by, say, £1,000 or so. New River Water-race. —Estimated to cost £10,000, and undertaken under Government subsidy of £5,000 ; to carry 16 statute heads of water. Length contemplated, 8 miles 70 chains. Of this length 6 miles 53 chains was completed previous to May, 1876, as stated in annual report for that year, and further works have been undertaken since. The amount of subsidy paid to date is £3,502 10s. 3d., leaving £1,497 9s. 9d, still to be paid, in event of w rorks being done by company to entitle them to it. No interest has been paid on Government advances since 20th March, 1876. Up to November last, 7—E. 1.