There was a private investor who interested to built rail line which connecting the rural part of Pasuruan to the port area.

The Pasoeroean Stoomtram Maatschappij (PsSM) was founded officially in 1895 based on Notarial Deed of H. W. F. Ligtenberg at 's Gravenhage (The Hague) on March, 14th also Koninklijk Besluit No.19 on March 5, 1895, operating as a tram company, proposed to the Government of the Dutch East Indies the construction of a rail network to solved the transport problems of the sugar mills and crops in the Pasuruan area, which hindered the export of agricultural products.

However, when they were used for tough duty pulling a series of heavy sugarcane wagons, these locomotives often faced losing power (underpowered).

Therefore, the tram quickly received a good response from the population, which used at that time otherwise traditional means of transport such as horses or carts.

machine shop (later became PT.Bromo Steel Indonesia (PT.Bosto)) to support the operational activities of several sugar mills in and around Pasuruan Regency and another factories.

De Bromo also provided steal beam manufacturing as operational support for PsSM infrastructure like rail lines.

Over time, the tram was partially shut down by the PsSM, because it was not able to compete with the increasing road transport due to the ageing of rail vehicles and infrastructure.