The settlers had two options for transporting themselves and their goods between the harbour at Lyttelton and the Canterbury plains: the Bridle Path over the Port Hills, or by ship over the Sumner Bar then up either the Ōpāwaho / Heathcote or Avon / Ōtākaro Rivers.

[2] During 1851, J. Tullock, a Lyttelton auctioneer, commissioned Edward Jollie and John Boys to survey a low-level tunnel between the port and the plains because he wanted to know how long one would be so he could estimate the costs.

[2] Shortly after the Canterbury Association settlers arrived in Lyttelton a meeting of the Society of Land-Purchasers was held and one of the first things the Society did was to appoint a Select Committee consisting of Guise Brittan, William Bayly Bray, James E. FitzGerald, and Richard Pollard to enquire into the best means of improving the communication between the Port and the Canterbury plains.

[3] The Select Committee heard that a tunnel on the line proposed would start about 180 feet above sea level, almost a mile long and was roughly estimated to cost between 100,000 and 150,000 pounds.

[3] On 6 December 1851, the Society of Land-Purchasers held a special general meeting to consider a Report of the Select Committee upon the best means of communication between the Port and the Plains.

It was therefore with concern over access to the plains that the Canterbury Provincial Council, formed in November 1853, established four months later a commission to examine the options for improvement.

[6][additional citation(s) needed] The inability of the commission in its final report to make an unequivocal recommendation as to the best option for connecting the port to the plains resulted in plans for the railway to be temporarily suspended.

[citation needed] This only exacerbated the problem to the point where, in 1858, Superintendent William Sefton Moorhouse prevailed upon the Provincial Council to consider the matter again.

The provincial Commission[clarification needed] that had been established to implement the recommendations of the council, chaired by W. B. Bray, set about investigating the two railway proposals that had earlier been considered, west and east of Mount Pleasant.

[specify] Provincial Engineer Edward Dobson favoured the latter route as it meant that Gollans Bay could be used to berth ships at a deepwater jetty without having to dredge the area.

During the campaign for election of the provincial superintendent in 1857, the tunnel became the central issue, with Moorhouse's opponent, Joseph Brittan, being opposed to the idea.

[7] Stephenson retained the services of English contractors John Smith and George Knight, who had agreed to complete the project within five years.

It was later discovered that Smith & Knight were in severe financial difficulty at the time, a fact which may possibly explain their request for the £30,000 extension on the contract.

The council concurred with the first request, honouring its commitment under the terms of the contract with Smith & Knight to assume responsibility for the immigrant workers should the tunnel be abandoned.

Moorhouse continued to advocate for the railway, suggesting that the government seek to raise a loan for the project and to engage the services of a "competent and responsible contracting firm" to undertake the works.

George Holmes undertook by written agreement on 16 April 1861 to carry out the contract on offer on the proviso that "the description corresponded with the fact".

[12] The nuisance of smoke in the tunnel created by steam locomotives prompted attempts by the Railways Department to alleviate the problem.