In 1886 a railway line was opened connecting Portsoy with coastal communities to the west, and reaching Elgin.

[1] There were rival schemes, and at the time Parliament held the view that too many railways would be a bad thing; in consequence it was the GNoSR inland proposal that was chosen, and authorised by Act of 26 June 1846; the others were rejected.

The financial crash that followed the Railway Mania made it obvious that the GNoSR would be unable to complete all of its intended network, and for the time being it planned only to build from Aberdeen to Huntly.

[2] There was still considerable local support for connecting some of the coastal settlements into the railway network, and as the money market returned to normal, energetic local interests succeeded in getting a company authorised: this was the Banff, Portsoy and Strathisla Railway, authorised by Act of 27 July 1857, to construct a 16-mile line from Grange station, on the main line of the (GNoSR), to the harbour at Banff and a 3+1⁄4 mile branch from the Banff line to a harbour at Portsoy.

Train movements approaching Portsoy Harbour had to negotiate a 1 in 30 descent from the passenger terminus, an extreme gradient requiring special precautions.

Stations on the line were at Grange, on the GNoSR and managed jointly, Knock, Cornhill, Tillynaught and Ladysbridge, with the terminus at Banff Harbour and at Portsoy.

The railway still had problems and at the end of 1862 it was agreed that the GNOSR should take over the working of the line from the beginning of February 1863.

At the end of the first year, shareholders were told that the passenger business had exceeded expectations, and "that the receipts were ample to meet the working expenses, but not to cover the whole of the interest charges".

[note 2][5] The desperate financial situation could hardly be allowed to continue, and in 1863 the GNoSR agreed to work the line.

The arrangement was ratified by Act of Parliament of 21 July 1863; the opportunity was taken to rename the company The Banffshire Railway.

[10][7][6] The directors continued in optimism, as the Act also authorised the company to build from Portsoy westward along the coast to Portgordon, about 14 miles.

Urging the GNoSR to make a start on the promised construction, the Banffshire bemoaned the fact that traffic was going from the coast on a carrier's carts to the Inverness and Aberdeen Junction Railway station at Fochabers.

[11] The extension to Buckie was not started, but in 1865 the Banffshire Directors cheerfully reported that "the line continues to be satisfactorily worked by the Great North of Scotland Railway".

On 12 July 1882 the GNoSR got an Act for the construction of the line, through to Elgin, which had long been a key objective for the company.