A meeting of interested parties was held at Lyon's salerooms, Charlotte Place, Sydney. As a result of the meeting the Great Southern and Western Railway Company was formed with the appointment of a provisional board of directors. A second meeting took place in August 1846 .
On 27 January 1848 the third public railway meeting was held in Sydney. A survey report by Lieutenant Thomas Woore R.N., was published and, later in April, presented to a Select Committee of the Legislative Council enquiring into "the practicability and expediency of introducing Railways into the Colony". On the 15 June 1848 a series of resolutions supporting railway development was carried unanimously by the Legislative Council. Their acceptance meant that private enterprise was unable or unwilling to begin the task without Government aid. The support of the Crown involved land grants to the Railway Company in "fee simple", guarantee of a 6% rate of interest on the first £100,000 of subscribed capital, and investment a of £30,000 (maximum) of Savings Bank funds in the project.
On 11 September 1848 a meeting was convened at the offices of the Gas Company in Sydney to obtain public support for a railway venture by issuing a prospectus. A committee was formed to make preliminary arrangements of the establishment of "The Australian, Southern and Western Railway Company". Local committees were formed at Bathurst, Goulburn, Parramatta, Queanbeyan, and Yass to attract investors among the pastoralists while a central committee in Sydney recruited notable businessmen. On 24 November the "Prospectus of the Sydney Tramroad and Railway Company" was published. (The tramroad refers to the intention to build an experimental line of tramway in the neighbourhood of the City).
The Sydney Railway Company was incorporated in October 1849 by a private Act of the Colonial Legislature, royal assent, however, was not received until January 1851. The Company suffered from an inability to attract both local funds and overseas capital loans. While the requisition of land and initial surveying went ahead the company could not afford to hire an adequate number of labourers. Further the effects of the gold discoveries led to large-scale shortages of workers throughout the Colony. The slowness of the company's engineering department and the long wait for Imperial sanction added to the company's plight. Changes in key personnel and policy 'back-flips' such as the return to a narrower rail gauge (4' 8 1/2") in New South Wales while Victoria persevered with a wide gauge (5' 3") only highlighted the company's maladies.
With the expenditure of the Sydney Railway Company rapidly exhausting its funds a financial 'bail out' was sought from the Government. This was done through both a written application for a loan and personal representations to the Colonial Secretary. On 27 December 1852 "An Act to empower 'The Sydney Railway Company' to accept and give security for certain pecuniary aid from the Government and to vest in the Governor the right to appoint three Directors of the Company" (16 Vic., No. 39 1852) received Royal assent. The Sydney Railway Company was authorised to borrow from the Government £150 for every £100 of paid-up-capital for the next 20 years resulting in a strong demand for the company's shares. The work of the Sydney Railway Company surged with railway construction from the city to Cleveland Paddocks and onto Ashfield, plus the ordering of locomotives, rails, and railway stock from England. While the company relied on local labour preparations were made to bring 500 immigrant workers out from England.
In August 1853 under the terms of the Act three Government Directors - F.S.L. Merewether (the Auditor General), H.G. Smith and Thomas Barker - took their seats at Board Meetings of the Company. F.S.L. Merewether was subsequently nominated as President of the company. By 1854 the cuttings between Sydney and Parramatta (with the exception of three) had been opened, with seven bridges, 24 culverts, and 9 miles of fencing completed while construction of the viaduct at Long Cove Creek (Lewisham) had commenced. The Government recommended extensive additional works on the City Terminus at Cleveland Paddocks and a branch line to Darling Harbour with the Directors also seeking to extend the railway beyond Parramatta. Cost overruns, the inability to raise further funds from the sale of shares, and repeated requests for direct Public loans led to a financial crisis for the Sydney Railway Company. Before years end the Government had legislated to take over all of the railway work in the Colony.
On 31 August 1855 the Colonial Treasurer delivered to the Commissioners of Sydney, and Hunter River Railways Debentures payable by the Government for the Sydney Railway Stock. On 3 September 1855, the President of the Sydney Railway Company made a formal transfer of their property to the Commissioners.