The Great Indian Peninsula Railway (reporting mark GIPR) was a predecessor of the Central Railway (and by extension, the current state-owned Indian Railways), whose headquarters was at the Boree Bunder in Mumbai (later, the Victoria Terminus and presently the Chhatrapati Shivaji Maharaj Terminus). The Great Indian Peninsula Railway Company was incorporated on 1 August 1849 by the Great Indian Peninsula Railway Company Act 1849 (12 & 13 Vict. c. lxxxiii) of the Parliament of the United Kingdom. It had a share capital of 50,000 pounds. On 21 August 1847 it entered into a formal contract with the East India Company for the construction and operation of a railway line, 56 km long, to form part of a trunk line connecting Bombay with Khandesh and Berar and generally with the other presidencies of India. The Court of Directors of the East India Company appointed James John Berkeley as Chief Resident Engineer and Charles Buchanan Ker and Robert Wilfred Graham as his assistants. It was India's first passenger railway, the original 21 miles (33.8 km) section opening in 1853, between Bombay (Mumbai) and Tanna (now Thane). On 1 July 1925, its management was taken over by the government. On 5 November 1951, it was incorporated into the Central Railway.

The Great Indian Peninsula Railway was incorporated as a company in 1849 by John Chapman, with its head office in London. The line was initially proposed to run for a length of 1,300 mi (2,100 km), to connect Bombay with the interior of the Indian peninsula and to the major port of Madras (Chennai) on the east coast. It was intended to connect the towns of Poona (Pune), Nassuek (Nashik), Aurungabad (Aurangabad), Ahmednuggur (Ahmednagar), Sholapoor (Solapur), Nagpur, Akola (West Berar), Oomrawutty (Amravati), and Hyderabad. It was meant for the purpose of increasing the export of cotton, silk, opium, sugar and spices.

The management committee consisted of 25 British men, including officials of the East India Company and banks in London, most of whom resided in Britain and some who had resided in India. The original 25 person board consisted of people such as John Stuart-Wortley and William Hamilton (both MPs from Britain who became the company's chairman and deputy chairman), Frederick Ayrton (ex-East India Company), cavalrymen such as Major Clayton and Major-General Briggs, Bombay residents John Graham, Col. Dickenson, Hon. Jugonnath Sunkersett and Sir Jamsetjee Jejeebhoy, bankers such as John Harvey (Commercial Bank of London) and S. Jervis (Director of the London and County Bank, Lombard Street), and directors of other railway companies such as Richard Paterson (Chairman of the Northern and Eastern Railway Company) and Melvil Wilson (Director of the Alliance Assurance Office).

An year after the passing of the Great Indian Peninsula Railway Company Act 1849 (12 & 13 Vict. c. lxxxiii), the first sod was turned ('Bhoomipujan' was done) of the first rail line at Sion on 30 October 1850, by the Chief secretary of Bombay Government, John P. Willoughby. The line was meant to be an "experimental line" between Bombay and Thana, whose gauge was set at 5' 6'' (1676 mm) by Governor General Lord Dalhousie in January 1851. The contract for this segment was handed to the contractors Faviell and Fowler, while the next segment from Tannah to Callian (today's Kalyan) to contractors George Wythes and William Jackson along with Jamsetjee Dorabjee Naegamwalla.

Work began, but was soon slowed down by heavy showers in October 1851. This was the same year the first locomotives for this line (Locomotives GIP-1 to 8) were built at the Vulcan Foundry in England. Several problems were encountered, for instance, the laying of the line among the swamp at Sion, worker strikes, among others. Then there was a question of whether the experimental line be a single line, or a double line. The contract opted for the latter option, but there were other ideas. Doing this would have saved money. In the end, the Government of Bombay asked to retain the 'double line' option, owing to complications in contracts and finances.

The following year, in 1852, Bombay received its first locomotive. Built by E. B. Wilson, the same firm that built Roorkee's locomotive Thomason, it was brought by sea to Bombay. The Bombay Telegraph of 17 February states that "She had been landed six days ..." suggesting that the locomotive landed in Bombay on 11 or 12 February 1852. On its arrival, it was pulled down a public road by 200 coolies, before it was put on the rails. This Locomotive was named "Lord Falkland" after the then Governor of Bombay, Lucius Bentinck Cary, who reportedly left the city on the eve of the occasion.

It was stationed on a land in Byculla, previously used for planting toddy. This plot of land, belonging to William Phipps, among others, was bought by the GIPR at a cost of ₹4000. This locomotive was a tank engine, meaning that it had all its fuel, water and boiler on the same frame, not having an external tender wagon. Four wheels were attached to the cranked driving shaft, and placed in the center. The Telegraph further stated that efforts were made to prepare the loco for work by 'the end of the week'.

The locomotive had its first run on 18 February 1852 from its stationing at Byculla, to Parel. Thousands crowded around the place, watching the loco at the entrance of its shed. The excitement was immense, with the natives amazed when the loco commenced its maiden journey. The engine started at a walking speed, later travelling at 15 miles an hour (about 24 km/h). A crowd ran after the moving contraption, hardly leaving the tracks clear. The locomotive traveled the 2 miles (3.2 km) between Byculla and Parel, waiting at its destination for some time. The second trip was completed, notably with a lady being among the passengers. On both trips the loco was stopped briefly, to correct some small matters; however, the engine was found to be in proper order.