David Davies and
Thomas Savin were prominent railway contractors in Wales at the time, and offered to take shares in the concern as payment for construction of the northern part of the line. The company appear to have invited Savin to meet Beeston to discuss the sharing of the contract work, but unsurprisingly Beeston declined. Raising subscriptions to fund the construction of the line proved exceedingly difficult, and throughout its life the line was under-capitalised. The main physical obstacle was the great mass of the
Cambrian Mountains just south of
Plynlimon, separating West Wales from the
Severn Valley; it was to be tunnelled as part of the section between Llanidloes and Pencader. The
Mid-Wales Railway had been authorised in 1859 to build from Llanidloes to
Newbridge-on-Wye, and the Manchester and Milford now realised that the other company's authorised alignment was largely over the same terrain as its own for miles or so from Llanidloes south to a place called
Penpontbren. The M&MR's reaction was to persuade Frederick Beeston to build that section at once, so as to preempt the intentions of the MWR, which had not done much in its first year. Beeston agreed to do this for £30,000 and £10,000 in paid-up shares; this was accepted by the M&MR, but the company did not have that amount of cash available, and persuaded Beeston to take the payment in instalments, and in paid-up shares at a 33% discount. All this was contingent on the M&MR acquiring the land, but the MWR was already negotiating with landowners, and the idea of stealing a march on the MWR was impossible. An uninspiring series of disingenuous proposals followed, eventually leading to legal action. At length the solution was arrived at: the Llanidloes and Newtown Railway had been authorised in 1859 to build east from Llanidloes, and was in the process of construction; indeed the M&MR always planned to make an end-on junction with it. If the L&NR were to build the section of disputed route (as far south as Penpontbren), and make that part of its line available solely to the M&MR and the MWR, then the problem would be solved. A parliamentary bill for the Llanidloes and Newtown Railway was prepared for the 1862 session, and it was authorised in that year. The two companies were to pay it 5% per annum on capital, and there was to be a
joint station at Llanidloes; the Manchester and Milford was to pay a third of the running costs of the station and interest on its capital cost. The L&NR pressed ahead with construction, and the section to Penpontbren and the joint Llanidloes station were completed in February 1864, and the L&NR transferred its own trains to the joint station, demoting its own terminus to a goods station. The Mid-Wales Railway too was building its line, and opened this part of it in September 1864, from which date it started using the "shared" route section and the joint station. Meanwhile the M&MR set about building west from Penpontbren; it managed as far as the village of
Llangurig, which was completed in 1864, construction then being halted. The section was laid with double track; only one goods is train is known to have reached
Llangurig station. West from the village there was to be a tunnel under
Banc Merin (on which construction actually began) from
Cae Gaer Roman fort to the
Afon Merin valley; then another, and before reaching the coastal plain of West Wales it would have crossed a viaduct high over the
Afon Ystwyth at
Pont-rhyd-y-groes. Hopes of one day completing the line remained, and meetings were held in 1872 proposing that, but it was a lost cause. Relations with Frederick Beeston, the M&MR's contractor, were difficult, and it is obvious that the M&MR, having little money in the capital account, had been unable to secure the land necessary for Beeston to make much progress. Notwithstanding the contract with Beeston (part of which was transferred by agreement to his son, Frederick Beeston Jnr, in 1861), the company now negotiated with Savin over taking on much of the construction. Savin was prepared to finance the work himself, taking shares in payment as well as £100,000 in cash at some later date. Beeston immediately sent a letter threatening a lawsuit if his preexisting contract were interfered with, and for the time being matters stalled. The M&MR route as authorised was to run more or less direct from
Lampeter through
Tregaron and
Devil's Bridge to
Pant-mawr and
Llanidloes. The intermediate terrain was thinly populated and had limited industrial activity, the objective being to connect Manchester and the port in southwest Wales as directly as possible. The M&MR now began to reconsider the wisdom of this, and decided to build to
Aberystwyth from Devil's Bridge. Ignoring its great difficulty in raising capital, the M&MR obtained an act of Parliament, the
Manchester and Milford Railway (Aberystwyth Branch) Act 1861 (
24 & 25 Vict. c. cl) in July 1861 for this extension, with additional capital authorised of £110,000, and in November 1861 the company proposed a further branch, known as the
Rhayader branch, and in the Parliamentary session of 1863 a harbour branch and other connections at Aberystwyth were being proposed. Now the route was to run along the east side of the
River Teifi valley from Pencader via
Llanybydder, Lampeter, Tregaron,
Pontrhydfendigaid,
Ysbyty Ystwyth and
Pontrhydygroes to Devil's Bridge. There, a junction station would be constructed, with the main line proceeding to Llanidloes, and a branch line to . ==Boardroom politics==