The payment for work executed under this contract, on its completion, amounted to... £38,601 3 9

Recommended by Consulting Engineer on accounts referred to him 567 11 0

Allowed by Provincial Government, difference between cubic and superficial measurement of timber 797 0 0

Allowed by Provincial Government for compensation 4,125 0 0

£44,090 14 9

Contract No. 3 was let by public tender on 16th January, 1864, to Mr. J. R. Davies, there were five tenders for this work, the highest being £16,034 15s. and the lowest £14,074, my estimate for the specified work being £15,082.

This work was let for £14,074, and operations having continued to 20th May, 1864, were then entirely suspended.

Considerable damage was caused during the suspension, by the action of the sea at high water during gales of wind, on the embankment in progress across the New River estuary. My representation of the damage so caused, induced the Government to order the resumption of this work at a restricted rate of progress in September 1864, but the pecuniary position of the Province, as well as of the contractor, necessitated its entire suspension in May, 1865.

The payments on the work executed to the time of this suspension amounted to £15,810 19s.

Contract No. 4, the Invercargill Station, was let by public tender on 10th February, 1864, to J. V. Carter and Co., there were seven tenders for this work, the highest being £5,896, and the lowest £4,399 5s. 11d., my estimate for the tabulated work being £4,390. This work was let after correction of the quantities estimated on for £5,020 0s. 7d., and was proceeded with to its completion in October, 1864, the total cost being £5,693 4s. 5d. but only £405 12s. 6d. of the amount expended is debited to this Railway, the remainder being debited against the Oreti Railway.

Contract No. 5 was let by public tender on 30th Jan., 1864; there were only two tenders for the work, the highest being £10,350 0s. 0d. This work was let for £8866 10s. 0d., and operations having been continued until 20th May, 1864, were then entirely suspended. The payments on the work executed to this date amount to £4,761 10s. 1d.

The Retention Money in the hands of the Provincial Government in November, 1865, on works executed under contracts 1, 3, and 5, was £2,308 0s. 0d.

£491 10s. 2d. was due for work executed on Contract No. 1, on which Contract, also, the Contractor pressed a claim of £2,545 16s. 0d., for excavation taken by him from Side Cutting, with a view of expediting the completion of the work; and of £2,537 0s. 0s., for extra cost of rock-cutting, as also a claim on contract No. 8 of £120 10s. 0d., for cubic instead of superficial measurement of timber.

In November, 1865, a proposal was made by the contractor for the settlement of all claims, which proposal was accepted by the Provincial Government, and, under instructions received from his Honor the Superintendent, I certified the sum of £16,250 0s. 0s. as due to Mr. J. R. Davies, account of Contracts No. 1, 3, and 5, in terms of letters of 15th and 20th Nov., 1865.

This sum may be debited as follows:—

Reserves in hands of Provincial Government ... £2308 0 0

Return to Provincial Government of Plant purchased of it by the Contractor for £2585 1s. 7d. 1500 0 0

Compensation for damage sustained by stoppage of works on contracts No.s 1, 3, and 5, from 20th May, 1864 ... 7509 0 0

Compensation for claims for works and breach of stone-breaking contract 4942 0 0

£16,250 0 0

VII.—SUSPENSION OF WORKS.

The works of Contracts No. 1, 3, and 5, were suspended on 20th May, 1864, and the works on Contract No. 2, were so far suspended as to restrict the expenditure to an outlay of £2,000 per month.

The works most exposed to damage in their incomplete state were the unfinished embankments across the various bays in the Bluff Harbor, and the embankment across the bay in the New River Estuary, these being all more or less exposed to