The first incarnation of the Tongue River Railroad began in 1981, when three companies, DS Cartage Corporation, Otter Creek Transportation Company, and Transportation Properties Inc., a Washington Energy Company subsidiary, formed a consortium to build a roughly 80 miles railroad from Miles City, Montana, where it would connect with the Burlington Northern Railroad, to Ashland, where Billings, Montana-based coal company Montco planned to build a large surface coal mine.