According to some sources, there have been thoughts about building a railroad to connect the town of Arad to the county’s hill region even before the year 1900.
We know that on the 18 of august 1896 The Arad – Podgoria Rail Transport Corporation was founded. The Corporation had three shareholders: Locs Rezső, Sármezey Ákos și Péterffi Antoniu. They gathered the necessary social capital for establishing the society from the owners of vineyards in the Vineyard ( Podgoria Aradului).
In the following years, several committees were set up, which in 1898 elaborated the plans for the construction of the line between Arad and Ghioroc, and in 1902 made public the projects that aimed to extend it to Pâncota and Radna. Due to the lack of necessary capital, these plans have remained unfulfilled for many years.
Only in 1905 a consortium of business men from Arad and Budapest managed to obtain from the Hungarian Ministry of Commerce the rights to build and exploit a one meter gauge line that would link the city of Arad to the Arad Podgoria. The event recorded on the 24 of September 1905, was followed a few days later, on October 4, 1905, by the assembly of the operative office that activated as The Local Interest Motric Railway Arad – Podgoria
At the head of the Society we find a well-known name, Antal Péterffy, or Antoniu Peterffi, if it’s to say his name in Romanian, a businessman from Arad who, as we have seen, was also involved in the Society set up in 1896. He was seconded on the management of the organization by a certain Dr. Simon Steiner who was recorded as being the representative of the Budapest business men involved in the project. The first president of The Local Interest Motric Railway Arad – Podgoria Corporation was Locs Rezső, another founder critical in the initiation of the project before the 1900.
All the localities on the route of the electric train contributed according to their resources, and shared in the Arad – Podgoria Railway Corporation. The biggest amount came from the town Arad – which bought shares for 50 thousand crowns, the smallest amount coming from Covăsânț which contributed 1200 crowns.
The Hungarian Minister of Commerce invested 351 thousand crowns in the project, equivalent to all the private shareholders put together. In total, thanks to some supplementary public funds the project was enabled to start with a capital of 3 million crowns.
With the certificate bearing the number nr 63611/24 09 1905, granted by the Hungarian Ministery of Comerce, The Local Motric Railway Arad – Podgoria Corporation gained the right to establish and utilize the rail for 90 years. Five years later, according to the Annex to the contract nr. 1/16 01 1911, the Corporation gained the right to electrify the rail.