D.—l.

The construction programme carried out during the year involved the borrowing of £2,685,727. From the Board's report it will be seen that sections of reconstruction and widening completed during the year totalled 402 miles and metalling was completed over lengths aggregating 285 miles. Although there was a definite shortage of bitumen-supplies during the latter part of the year it is interesting to note that 433 miles of dustless surfacing were added during the year, this being the greatest length of new sealing completed in any one year since the Board commenced its operations. The replacement of bridges covering a length of 11,676 lineal feet was another fine achievement when it is realized that the shortage of reinforcing steel somewhat retarded the Board's programme. A high standard of maintenance has been continued throughout the year and every effort made to preserve the assets already created. The amount of funds available for expenditure on highways during the current year has necessitated a reduction in the normal programme, but it is the intention of the Board to keep up the standard of maintenance and to continue as far as possible the programme for the replacement of dangerous bridges. Where considered economical, and provided the necessary supplies are available, paving will be extended. HYDRO-ELECTRIC DEVELOPMENT. The operation of the Government hydro-electric installations continues to be most successful, and the financial results for the year under review were again very satisfactory. Operating Results. North Island System. —The plants at Arapuni, Waikaremoana, Mangahao, and Horahora have been fully operated throughout the year. Some assistance from various local plants—principally the King's Wharf Station, Auckland, and the Evans Bay Station, Wellington—was necessary during the autumn and winter months to meet the ever-increasing demand for power. The result of the year's operation was as follows : — Capital investment at end of year .. .. 10,429,240 Revenue .. . . .. . . . . 1,328,499 Operating-expenses .. .. .. .. 368,015 Balance .. .. .. .. £960,484 The balance has been used in paying £345,207 for interest, £15,477 to the Depreciation Reserve to bring it up to the statutory limit of 12i per cent, of capital, and £418,552 to bring the Sinking Fund up to statutory requirements. The balance of £181,248 has been transferred to Reserve Fund. The Reserve Accounts established in connection with, this scheme show that £1,081,075 has been credited to Depreciation Reserve, £1,159,820 to Sinking Fund, and £181,248 to the Reserve Fund. South Island System. —The plants at Lake Coleridge, Waitaki, Monowai, and Arnold River have also been operated successfully. Throughout the year it was found practicable and necessary to carry out extensive maintenance-works and to effect minor alterations to the two latter plants which, before being taken over by the Government, were constructed and controlled by local authorities. The year's operations resulted as under £ Capital investment at end of year .. .. 6,936,918 Revenue .. .. .. .. .. 613,612 Operating Expenses .. .. .. .. 174,959 Balance .. .. .. .. £438,653 The balance has been used in payment of £246,919 for interest, £124,931 to the Depreciation Reserve, and £66,802 to the Sinking Fund. The various Reserve Accounts established in connection with this scheme show that £755,026 has been paid to the Depreciation Reserve, £417,604 to Sinking Fund, and £87,199 to Reserve Fund. There is still a deficiency of £252,671 as against the statutory requirements of Sinking Fund.

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