The Highland Railway was established in 1865 and became dominant in the area of Scotland between Perth, Inverness and north and west of there.

It operated the Far North Railway Line from Inverness to Wick and Thurso, but the difficult geography meant that the line formed a wide sweep round the western end of the Black Isle, to avoid crossing the Beauly Firth and the Cromarty Firth.

[1][page needed] The two companies had been adversaries for some time, and in 1883 and the following years there had been a state of continual warfare over junctions, frontiers and running powers.

The Highland Railway began preparing its opposition to the GNoSR when the latter wrote proposing a "solution" to the "problem": that the GNoS should simply be given running powers for its Aberdeen trains into Inverness.

This startlingly bold proposition confirmed the Highland Railway's fears, and the Highland Railway decided to respond to the tactical attack with its own tactical response: it wrote back proposing that the two companies should consider merging, and that meanwhile the proposed new lines, and any running powers, should be held off until the merger was negotiated.

There were serious difficulties in obtaining possession of the land at the Conon end, and money was desperately short, so that construction was delayed.

[3] A private station was opened at Rosehaugh, serving the residence of James Douglas Fletcher, a director of the Highland Railway.

The difficult terrain of the Black Isle made it especially susceptible to competition from road transport for both passenger and goods traffic.