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subterranean structure placed midway under the hill; that the headrace be dammed at the same point as in schemes No. 1 and 2, but with a dam in which there are no openings ; that a penstock-intake structure similar to the existing one be erected, in which the fittings now existing can be used as in the No. 2 scheme ; that the penstock tunnels between this intake and the power-house should be alternately on different grades in order to minimize the amount of disturbed rock at any section as much as possible. The subterranean power-house would be much smaller than the present one, as all switching and control gear would be on the surface, and only the generators, turbines, and valves, together with the necessary governor gear would be underground. From the power-house the water would be carried away by tunnels which, in order to give greater stability, would be carried out fanwise in plan. In order to deal with surplus water and floods I propose that the diversion tunnel should be lined with steel from a point a Dove the dam to its outlet, so that it can operate as a pressure tunnel. At its outlet it should be divided into a number of branches, probably three, each branch being fitted with a piston valve similar to the Lamer-Johnson valves now controlling the water for each of the penstocks to the present power-house, or other suitable high-velocity dispersion valve and an emergency stop valve. One or more of these valves, as the case might be, would be continually in operation under maximum head, and would be so adjusted from day to day or hour to hour that the level in the lake would be kept nearly constant, and would never be allowed to rise above the predetermined level. It is realized that a structure such as this diversion tunnel could not be operated indefinitely without attention. This is one of the reasons for having a number of valves at the outlet, so that during periods of low river they could be overhauled alternately, but, even allowing for this, we have still the main gates which now control the tunnel. These could be drawn up and any repairs or renewals necessary could be done to them while the flow was being controlled by the new outlet valves. In this way the operation could be carried on for a great many years, but even with these facilities it must be recognized that the day would come when the lining of the tunnel, and the cast-iron frames of the gates, would require attention if not renewal, and to enable such attention to be given without the shutting-down of the generating-plant, a duplicate diversion tunnel would be required. In order to avoid the dead capital involved in the construction of this duplicate tunnel at the present day, but at the same time to enable it to be constructed with facility in the future, I propose that its intake and a short length of the tunnel, ending in a shaft structure with grooves in which stop-logs could be installed, be constructed while the present shut-down continues. When I say " stop-logs," something more than baulks of timber are meant. The stresses to be withstood are so great that the stop-logs would probably take the form of very heavy steel girders. These need not be provided until it was desired to proceed with the duplicate tunnel. In my estimate of this scheme I have provided for improving the present diversion tunnel as in all the other schemes, and spending of £30,000 in the preliminary work of the second diversion tunnel. This scheme avoids the £175,000 required under the other schemes for protection of the waterfall, but, on the other hand, it sacrifices a certain amount of the available head, with the result that at least 15,000 kilowatts less could ultimately be developed at Arapuni. This is a decided handicap on the scheme in question. See P.W.D. 79660. Placing the matters in the same order as in the other schemes — £ The estimated cost would be immediately .. .. .. .. .. 495,000 Of which £60,000 is for the improvement of the present diversion tunnel. This item I have shown as a more or less optional item in schemes No. 1 and No. 2, but it cannot be so regarded in scheme No. 3. It is an essential part without which the scheme could not be carried out safely. In the future the second diversion tunnel would require to be finished at a cost of .. 150,000 This would not become necessary for forty or fifty years, or perhaps even longer, depending on the effect of the Waikato River water upon metal structures entirely submerged. Making a total of .. .. .. .. .. ..£645,000 Scheme No. 4. No. 4 scheme is the same as No. 3, with this exception, that the water is allowed to proceed by its present course, the present spillway being used. The cracks where they exist under water would require to be staunched either by cement grouting, bitumen grouting, or by blanketing with a bituminous cement substance, or by covering with a telescopic concrete joint. If this were done it would not be necessary to build a weir across the headrace, nor would it bo necessary to provide for the commencement of a second diversion tunnel, and the £60,000 for the improvement of the present diversion tunnel would be moved from the category of essential to the category of advisable but not imperative. An objection which might be taken to this scheme is, however, the fact that it does not remove the pressure, which in my opening remarks I assume to have caused the bending of the columns in the vitric tuff and eventually the splitting of the rock on the lines of the columnar jointing. It is conceivable that the amount' of splitting which took place might considerably increase, so that the steps taken for staunching the existing crack would be inadequate, and a certain amount of leakage might begin again, and in the course of time might, if no steps were taken to check it, erode the material lying between the vitric tuff and the massive breccia, and bring about collapse to some extent of the"upper stratum. Naturally, steps would be taken to prevent any such happening, but these steps would involve the shutting-down of the power-house again while the matter was dealt with, and we might be forced to eventually do all the works indicated under the No. 3 scheme. See P.W.D. 79660.