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Hon. Minister of Public Works. Some time ago, when speaking of the Waipu Railway, you remarked that the probable returns from such a railway did not appear from the files to have been gone into very closely in the past. The probable business in the Waipu district, if a railway were constructed, has now been estimated, and is set out on attached report by Mr. Wood, Inspecting Engineer. It appears from this that at the present time the probable receipts would be £3,110, and the expenditure, including interest, £11,6.15. Later on, when the country is much more developed, the probable revenue would be £4,150, and the expenditure £12,115. It will be seen that neither now nor within mcasurablo future will the railway even pay working-expenses. 16th April, 1924. F. W. Ft/bkhrt. IV. OISBORNE-NAPIER RAILWAY. Uisbome- Wairoa' Railway. The Engineer-in-Chief. With reference to the suggested alteration of tho railway route between Gisborne and Wairoa, I have again looked into this matter on the ground. I found the surveys had not advanced very far, but sufficient information had been obtained to locate the position and decade the length of a tunnel under the Wharerata ridge. On the present information it appears advisable to construct a tunnel 3i miles in length under this ridge, at an elevation of 900 ft. above the sea on the Wairoa side and 800 ft. on tho Gisborne side. This will necessitate grades of linso on each side of the tunnel for distances of about 7 miles on each side. It is to be noticed that the greatest elevation of this line will be 900 ft., whereas the Ngatapa route rises to a height of 1,040 ft. above sea-level. I have gone carefully into the surveys on the latter route, and have gone over the ground where no surveys have been made, so that if I am not able to give exact estimates of either route I can safely make comparative estimates of each. I estimate the Ngatapa route will be at least 50 per cent, dearer than the Wharerata route. The one and only thing in favour of the Ngatapa route is the fact that it opens up more land than the Wharerata route. I shall show presently that the traffic to be derived from the greater area of land opened up is insufficient to pay even J per cent, on the additional expenditure that will be incurred on the Ngatapa route. Before doing so, however, I wish to make a closer comparison than 1 was able to do in my last report, since I have now been able to get closer estimates of the two lines, and the lengths of each. The estimates are based to a great extent on my experience of construction in similar country, and will need to be checked by accurate surveys, but they are close enough at least to show the necessity of making surveys before any more work is done on tho present authorized route. I have no hesitation in saying that 1 consider the Wharetata so much better in every way than the Ngatapa route that no more work beyond Ngatapa should be done, and that trial line surveys by a large party should be at once started on the Wharerata route. The following gives briefly a comparison of each route : — Wharerata. Ngatapa. (1.) Length of line, Gisborne to Wairoa .. .. .. 63 miles .. 74 miles. (2.) Length of new line t) construct .. .. .. 39 miles .. 00 miles. (3.) Cost of construction .. .. .. .. . . £1,200,000 .. £1,800,000. (4.) Length of summit tunnel .. . . .. .. 3J miles .. 1J miles. (5.) Area of country opened up by railway along route . . 54,000 acres .. 215,000 acres. An apparent disadvantage of the Wharerata route is the longer summit tunnel; but this tunnel can be fairly easily and economically ventilated by shafts, so that no disadvantage will be occasioned on this account. Although they were given in my last report, I will again enumerate the advantages of the Wharerata route as disclosed by the above comparison, and from a general consideration of the character of each line : — (1.) A saving of 11 miles in length. This means, apart from the saving in time on a main line, a reduction in expenditure per annum on maintenance of £4,000, or the equivalent to a capital cost of £80,000. (2.) A saving of 21 miles of line to construct. At a rate of expenditure consistent with a fair allocation of money to various lines throughout the country it is probable that it would take three years longer to complete the Ngatapa than the Wharerata route. As neithor route is likely to pay until completed, at the above rate of progress there will be an increase in interest charges at 5 per cent, on the Ngatapa route, amounting to £225,000 over similar charges on the Wharerata route. This should be added to the capital cost of tho Ngatapa route. (3.) After examining the country I am convinced that the trouble from slips mill be considerably less on the Wharerata route than on the Ngatapa. The former route lies almost entirely in sandstone country, whereas the latter is in papa country for a considerable portion of its length. It is hard to estimate tho additional cost due to this, but it is more likely to be over £50,000 than under. (4.) The incorporation of the Waikokopu Branch Railway into the main line docs away with a 25-mile branch line, which is very unlikely to pay any interest on its cost of construction. It simply means you have 25 miles of additional line tapping country that a main line can serve if located in the proper place. I cannot see how this line can pay as a branch to a main line connecting the ports of Napier and Gisborne, and taking away a larger portion of the traffic it might have otherwise obtained. If this be correct, we have interest charges on tho £500,000 that this branoh has taken to construct to add on to our already heavy interest bill on the Ngatapa route. (5.) In the construction of a railway through rough country a good service road is a necessity, and modern methods of transport require a metalled road. On the Wharerata route we will have an excellently metalled road all the way, whereas on the Ngatapa route it will be necessary to construct and metal a considerable length of service road. Tho extra cost of service roads on the latter route will amount to something like £40,000, and even then the road will not bo nearly so good as the Wharerata Road. If the roads are not brought up to a high standard on the Ngatapa route the costs of transport will be excessive in comparison with the Wharerata route. The present Wharerata Road gives an ideal access to the long tunnel under the saddle. To sum up the conditions in favour of the Wharerata route from a financial point of view, this route will cost £995,000 less than the Ngatapa route. This is made up as follows ; — £ (I.) Construction cost of railway . . . . .. . . .. .. .. 600,000 (2.) Cost of service roads .. . . .. .. .. .. .. 40,000 (3.) Capitalization of maintenance ... .. .. .. .. .. 80,000 (4.) Estimated cost of slips .. .. .. .. .. .. .. 50,000 (5.) Interest charges while under construction (three years) .. .. .. .. 225,000 £995,000 Of course, the fifth item on this list can be reduced by constructing the line at a faster rate, but it is doubtful if the amount under this head can be made less than £150,000, thus reducing the total cost to £920,000. I have stated above that I consider there is only one thing in favour of the Ngatapa route, and that is the fact that it serves a greater area of country between Wairoa and Gisborne. It must not be forgotten, however, that the Wharerata route also serves a fair area of country. However, I shall consider tho local traffic from the Ngatapa route separately before making further comparisons. The whole of the land served is sheep-country, and the traffic must be considered only on this basis. There is certainly dairying-land at either end, but it is too close to Wairoa or Gisborne to be considered as revenue-producing to this railway.