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The power-house has been completed, and the erection of the machinery is in hand. It had been hoped_that this power-house would have been completed somewhat earlier, but great difficulty has been experienced in obtaining suflicienVcarponters and other skilled men, and this hindered the work somewhat. As from tho ail-race now discharges into the Mangaore Stream, it was considered raise the banks of this stream over the low-lying country from below the railway-line Manawatu River, a distance of 1 mile 56 chains. The Makarua Drainage Board, which controls this area, was itself proposing to carry out a scheme of banking to deal with the flood-water of this river, quite independently of the Department's tail-race proposals. Arrangements were accordingly made for the Board to carry out the banking on lines set out by the Department. The Makarua Drainage Board, the Buddy Drainage Board, the Horowhenua County Council, and the Foxton Borough, all of whom receive benefits from the work, have agreed to contribute to the cost of the work. It was also necessary to erect a new bridge, 80 ft. Jong, on the Foxton-Shannon Road, on level as the top of the banks. A very difficult feature in connection with this installation has been the erection of the main transmission and telephone lines. Altogether some 200 miles of transmission-polos and 160 miles of telephone-poles have been Cables were run for 150 miles of transmission-line and over practically the whole length of tho telephone-line. The difficulty of the work was largely on account of the very rough nature of the country traversed ; consequently a great deal of preparatory work was involved, requiring the construction of some 30 miles of track, and the installation of no less than 600 gates. Owing largely to the cost and difficulty of transporting the long and heavy ironbark poles across country, the roughest sections, notably between Paekakariki and Khandallah, were designed for the use of steel towers, which could be sledged into position in small bundles. The scope of the work extended on the west coast from Wellington to Wanganui, and on the Wairarapa side from Masterton to Waipukurau. This work is well in hand, and will shortly be completed. The erection of substation buildings at Bunnythorpe, Masterton, Mangamaire, Woodville, and Dannevirke is in hand, and all the material for the equipment is on order. A contract for the building of the Khandallah substation was placed during the year, and is now well advanced. The structural steelwork for the switchgoar is completed, and switches mounted thereon. All subsidiary buildings have been erected, and oil-tanks and lightning-arresters are in position. WAIHOU AND OHINEMURI RIVERS IMPROVEMENT. Upper Waihou River. Mangaiti-Tirohia Section. —During the period 148 chains of final stop-bank have been constructed by a small drag-line and the dredge " Waihou," and 226 chains of preliminary stop-bank by hand-labour, leaving only 26 chains on the section untouched. ' gararahi. —Left bank: All drainage on this section has-been reversed into drain H, "and tho temporary flood-gates thus rendered inoperative have been removed. Right bank : The Waihou dredge, working two shifts, has built the stop-bank to final section, completing 53 1 chains during the period. The soiling of same has also been completed. Lower Waihou River. Ngahina-Nelherlon. —Left bank: All interior drainage has been completed, with flow mainly into drain IT. The gaps in preliminary stop-bankj,down to Netherton have been closed, and the broaches, 4 chains in length, caused by the flood of tho 27th May, are being closed. Right bank : A small drag-line has extended tho preliminary stop-bank to the mouth of Morrison's drain at 5 m. 62 eh., a length of 90 chains, and has also widened the railway outfall drain at Waimarie Bend to 12 ft. bottom width for the complete length of 31 chains. Nelherlon-Wharepoa. —Morrison's drain at 5 m. 62 eh. (right bank) is complete, and in Alexander's drain the dipper dredge has excavated from the river for 47 chains. About 3 miles of willows on both banks have been ring-barked. Komata Creek. —The excavation of the creek-bed was completed by a small drag-line, and stopbanks have been trimmed on both banks to the high ground, with the exception of 16 chains on the right bank below the railway. The spoil for the raising of the railway and bridges is in position. Ohinemuri River. —Left bank : The log-hauler has commenced operations at the new junction, and has already cleared 25 chains of bank. One of the large drag-lines has constructed 126 chains of stop-bank to final section from 7 m. ; 36 eh. to sm. 30 eh., and the Waihou dredge has completed a length of 9 chains where the critical line crossed the Waihou meander to 6 m. 40 eh. and 6 m. 70 eh. The construction of the stop-banks over the Tapu Kopuarahi at 6 m. is being done by hand-labour. The second large drag-line has constructed 192 chains of stop-bank to final section, from 3m. 55 eh. to 1 m. 26 eh., and from om. 14 eh. to om. 6 eh., connecting to the final stop-bank completed by relief works from om. 14 eh. to Im. 26 eh. This machine has now in hand the section 3m. 72 eh. to sm. 15 eh., to connect with the stop-bank being erected by No. 2 Ruston. Of this 3m. 72 eh. to 4m. 68 eh. has been completed. The deviation of the Paeroa-Waihi Railway at om. on the stop-bank chainage is now in hand by the contractor. Numerous small culverts have been