Hi Steve, Forget about chain tension for a moment, are the engine and axle sprockets in line?
If not, you will notice shards of aluminium from the sprocket deposited inside the chain guard and local area.
The chain tension will alter as the engine mountings are tightened: I've found best to check as each clamp is tightened.
Unless everything is perfect, you will find the chain tension varies as the wheels are turned, so set to avoid tight spots: if you listen whilst turning the wheels, tight spots in the chain will be evident.
You need good sprockets and chain. They must be in line and not twisted. Laser tools for this purpose are available at most Karting websites.
I set our chains to about half inch play midspan on the tightest point.
Hope this helps.
Dave.
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