Having had all of carriages destroyed by a fire in March 1930, the SMR arranged for services to be operated by the New South Wales Government Railways (NSWGR).

However, with the service running at a considerable loss, the SMR sought to reduce costs by introducing diesel railcars.

As a result of this proposal SMR also approached Commonwealth Engineering for a request for a tender.

Upon completion the railcars were tested on the NSWGR network in the Sydney region, travelling as far as Penrith.

Railcar No.1 was delivered to East Greta Junction on 26 April, followed by No.2 on 2 June and No.3 on 14 July.