In his capacity as Resident Engineer in the Victorian Railways, Watson superintended the construction of the Geelong-Ballarat railway line, the Sandhurst and Echuca line, the North East railway line and its branches, the Gippsland line and branches, and many of the lines to the Western District.
In 1878, a political crisis let to the Government dismissing the Engineer in Chief Thomas Higinbotham along with 137 other public services in what became known as "Black Wednesday" - 8 January 1878.