D.—l.

May last. The next section, to Wellsford, is approaching completion, the rails being now laid over it and ballasting being in hand. The Te Hana Section is all in hand, and the formation fully half done, and the Kaiwaka Section has been started. Good progress has also been made with the extension of the survey northwards. The line has now been located to a point about five miles north of Kaiwaka, and a trial line has been run nearly as far as McCarrolPs Gap. This line passes somewhat to the east of Maungaturoto Township, but in order to see if it would be practicable to obtain an equally good line more to the westward further explorations in that direction are now being made. The expenditure on this railway last year amounted to £28,410; but, in view of the increased number of men already employed and the further increase which it is proposed to make shortly, I am asking for a vote of £80,000 for the current year. Auckland East Coast (Waihi-Tauranga.) The trial survey for a railway between Waihi and Tauranga promised in last year's Statement has since been put in hand, and a strong party is now engaged upon it. The survey has already been completed between Waihi and Katikati, and exploration has been carried on for several miles beyond. As the latter portion of the route is not of a very easy character, it will be some time before the survey is completed, and until the results are available it will, of course, be impossible to make any comparisons between this route and the suggested alternative line via Mamaku and Te Puke. The Government is, however, strongly impressed with the necessity of constructing a railway to connect the Bay of Plenty district with the Auckland railway system, and has definitely decided to ask for the authorisation of the line. It will be impossible to do so this year, however, as the law requires that authorising Acts shall define the route of the railway and the two termini thereof, and it is manifestly impossible to do this until a decision is arrived at as to the particular line to be adopted. In addition to the two routes already mentioned, a third has been suggested, to leave the existing railway either at Morrinsville or Okoroire, or somewhere between these places. Each route will be carefully examined and, if necessary, fully surveyed, with a view to a definite decision being arrived at next session, when a Bill to authorise the construction of the line will be brought down. GISBORNE-KoTORUA. The section between Puha and the Willows Crossing, on the Waikohu Elver, was completed and opened for traffic in May last. The line cannot be extended to the permanent station at Waikohu until the completion of the Waikohu Bridge. The contract time for this structure expired on 16th instant, but it will evidently not be completed for some weeks. As soon as it is finished, however, the rails will be laid over it and train-running extended to Waikohu. The formation of the Waihuka section has been taken in hand and good progress made with it. In view of the importance of extending the line through to Motu as early as practicable an increased force of workmen is now employed, and it is intended to make a further increase in the number shortly. Last year's expenditure amounted to £9,248, but for the present year a vote of £60,000 is asked for. New Plymouth - Sentry Hill Deviation. This work has now been finished, the new line having been brought into use in December last. The total expenditure on the deviation amounted approximately to £36,000. This includes £18,233 involved in connection with the purchase of the necessary land. The amount expended last year was £11,743.

IV