Setting aside how those concerns are ridiculously OOC and probably well beyond the scope of this quest, there's a limit to how useful railways can be here. One of the key issues is the large swaths of the country are extremely sparsely populated, which need to be connected with the rest. Rail transport works extremely well for connecting major population centers and pretty good at linking not-so-major ones. Thing is that the areas most in need of connection are relatively small. Rail doesn't work so well for connecting small towns and villages. Naturally, said small towns have significant influence in politics, courtesy of the Agrarianists.
Moreover, this won't be the death knell of the passenger railroad industry by any stretch of the imagination. We're basically talking about making an equivalent of the U.S. Numbered Highway System. Things didn't get really bad for the railroads until the Interstate System, which came three decades later*.
*Massive oversimplification, there were plenty of other factors but I'm trying to stay on topic here. Basically, building those roads won't cripple the rail industry. We'll have to do a lot more screwing up to get into the RL passenger train in the U.S. situation. We have room for both.
Thing is that we need a lot of small scale transportation to connect small mining communities and farms to the national economy.
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