The Hokkaidō Colonization Office was established in 1869, as the new Meiji government sought to take advantage of the natural resources of the island.
The American engineer Horace Capron, invited to Hokkaidō by the government for this purpose, determined the presence of a sizable coal deposit in the upper reaches of the Horonai River.
The government decided Lyman's plan was cheaper, and in March 1878, they invited yet another American engineer, to begin land surveys in preparation for construction.
Crawford quickly determined that much of the land, being swampy, was not suitable for rails, stations, or other buildings, and that the river would freeze over in winter, rendering this shipping plan feasible for only around 150 days each year.
The following year, Emperor Meiji made his way to Hokkaidō on his national tour, rode the line from Otaru to Sapporo, and gave his approval.
The official opening ceremonies were held on September 17, 1883, and were attended by members of the royal family, the military, and Inoue Masaru, chief of the Railroad Office.
The route from Horonaibuto (today Mikasa Station) to Ikushunbetsu began operations in 1886, and though coal prices dropped soon afterwards, this contract and the ensuing relationship between the Railroad and Murata's ventures helped recoup all the costs of the initial construction.