D.—l.

The extension of the Feather,ston Street wing of the Wellington Station building was completed and occupied during the year. Good progress was made with the electrification of the Wellington-Paekakariki section of line. Christchurch station and yard re-arrangement was continued, and a number of small depots and the car-storage facilities were completed. Further progress was made on the Oamaru foreshore-protection work. The new railway-bus terminal and social hall at Dunedin were completed and are in occupation. The duplication of the line from Papakura to Horotiu is progressing, the portions between Huntly and Ohinewai and between Papakura and Paerata being opened for traffic during the year. The Plimmerton—Paekakariki duplication (except 1| miles where five tunnels are situated) was brought into operation. Progress is being made with the piercing of the tunnel 011 the St. Leonards - Sawyer's Bay duplication. The work of easing grades and curves in various localities and the deviation of lines at Turakina, Scroggy Hill, and Palmerston North was continued. Approximately 3 miles of track were laid at the south end of the Palmerston North deviation. A new power substation at Otira is being constructed to handle the electric current which will be drawn from the Public Works Department's electric powersupply lines. This will replace the existing steam-generating plant at Otira. Seventy-nine new dwellings were erected throughout the Dominion for the housing of railway employees. Further additions and improvements were effected in the equipment for signalling and communications. Forty new type J steam-locomotives were imported, and further work was carried out in the New Zealand Railway Workshops in constructing new Ka and Kb locomotives, also cars, vans, and wagons. SETTLEMENT AND OTHER ROADS. During the year under review perhaps the most notable major roadwork completed was the coastal deviation between Plimmerton and Paekakariki. This section was formally opened to traffic on 4th November, 1939, and proved to be of considerable value in the safe handling of motor traffic during the period of the New Zealand Centennial Exhibition held at Wellington. The deviation eliminates the old section of highway traversing the Paekakariki Hill, reducing the distance by just over four miles. The highest point on the Paekakariki Road was 815 ft. above sea-level, as against 290 ft. on the coastal route, while the steepest grade on the old route is I in 9, compared with 1 in 17 on the new route. This coastal section has since been incorporated into the State highways system. Further progress was made with the construction of other important arterial connections, such as the Rotorua-Waikaremoana, Waiouru-Tokaanu, TaumarunuiTokaanu, Main South Westland, Haast Pass, and Hollyford - Lake McKerrow Roads. However, towards the end of the year the scale of operations was reduced in consequence of war conditions and the fact that numbers of workmen enlisted or were transferred to other employment. With regard to settlement roads, activities were continued throughout the year in the direction of improving and metalling access to producing areas in backblock districts. Altogether 402 miles of road were formed, 699 miles were metalled either directly by the Public Works Department or by local authorities in receipt of financial assistance in the form of Government grants and subsidies. In addition 6,563 lineal feet of bridging was completed, and culverts aggregating a length of 56,122 ft. were installed. The net expenditure from the " Roads " vote of the Public Works Fund for the year ended 31st March, 1940, amounted to . £1,124,590, compared with £1,290,8.38 for the year immediately preceding.

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