To eliminate complaints and reduce the cost of transporting coal the company opened a coal yard at Bilton Junction where the railway to Ripon crossed Bilton Lane. Again the coal was transshipped from Bilton Junction by steam road locomotives. This was in 1880 and, though the shorter road route alleviated both the transport and environmental problems, it was not the ideal solution. The growing demand for ‘town gas’ outstripped the carrying capacity of these road locomotives and in 1908 - 1909, a narrow gauge railway was constructed from Bilton sidings to the New Park gasworks. The gas company purchased its first locomotive in 1908 which it named 'Barber' after the chairman of the gas company The line, which included a tunnel carrying the tracks under the A59 at New Park and today’s Knox Avenue estate, was officially opened in December 1908. The works were enlarged again in 1908 – 1909, 1911 and 1914. In 1925 the Harrogate Gas Company took over the Pateley Bridge Gas Company whose works were at Glasshouses and by 1927 Harrogate Gas Company extended its
area of supply again by absorbing the gas undertakings of Knaresborough UDC, Tadcaster, Boston Spa and the Boroughbridge. On nationalization in 1949 the undertaking became part of the Harrogate / York Group of NEGB. The almost insatiable demand for gas to meet Harrogate’s expanding township meant that even the narrow gauge railway could not carry enough coal and during the 1950s a large proportion of the coal had to be transported by road (20 tonne diesel wagons) which led to the decision in September 1955 to close the line and revert to road transport. The last train passed through the New Park tunnel in July 1956.