The first part of the project was to lay a third rail inside the existing tracks at Jacobacci and the Chubut Valley so that they could be used by the narrow gauge vehicles. New tracks were laid to extend the Chubut Valley line from Trelew to Rawson at the coast and westwards to Las Plumas. After floods destroyed much of the line in 1931–1932, work began again in 1934 with new plans, with a 105 m-long bridge and a 110 m-long tunnel to be built.