[2] Continuing his investigations Mandeno identified what he thought was another suitable site in a narrow gorge that could utilize the Kuratau River.

Both them and the Department of Māori Affairs who were responsible for administering the block were concerned over how much valuable farming land was going to be lost and what compensation would be offered.

Construction began in 1959 under the management of Tony Campbell of Fletchers what was intended to be a 27.4-metre-high (90 ft) concrete arch dam which would convey the water via a short tunnel and canal to penstocks and hence down to the power house.

However, as excavation began it was found that sides of the narrow gorge in which the dam was being built were unstable, with a large amount of sand being encountered.

This was a common issue on the volcanic soils of the central North Island and had been encountered on some of the power stations that had been built on the Waikato River.

[3] Mandeno, Lee & Brown quickly redesigned the power station to make use of another site 400 metres further upstream for which they designed a low rock-fill dam from which an open canal, penstocks and a surge chamber could convey the water to the powerhouse.

[2] By early 1962 one penstock had been installed which allowed its associated generator to be commissioned and then commence commercial operation at midnight on 16 April 1962 and immediately began bringing in a potential revenue of £150 to 200 per day.

The canal was earthquake strengthened, fitted a with drainage system under the lining and relined with concrete and shotcrete to solve excessive leakage.

At the same time erosion below the spillway was repaired with shotcrete, the fastening of the powerhouse's cladding was improved and the penstock supports were strengthened.

[2] Lake Kuratau is popular with a range of recreational users, including duck shooters and fly fishermen.

Despite covering 100 hectare the lake which created in what is basically a long narrow flooded river valley has a relatively small volume.