Pilatus Railway, Alpnachstad, Esel Summit, Obwalden, Switzerland

The first project to build the line was proposed in 1873, suggesting a 1,435 mm (4 ft 8 1⁄2 in) standard gauge and 25% maximal gradient. However it was concluded that the project would not be economically viable.
Then Eduard Locher, an engineer with great practical experience, proposed an alternative project with the maximal grade raised to 48% to cut the route in half. Conventional systems at the time could not handle such gradients because the vertical cogwheel that is pressed to the rack from above may, under higher gradients, jump out of the engagement with the rack, eliminating the train’s main driving and braking power. Instead, Locher placed a horizontal double rack between the two rails with the rack teeth facing each side. This was engaged by two cogwheels carried on vertical shafts under the car.
This design eliminated the possibility of the cogwheels climbing out of the rack, and additionally prevented the car from toppling over, even under the severe cross winds common in the area. The system was also capable of guiding the car without the need for flanges on the wheels. Indeed, the first cars on Pilatus had no flanges on running wheels but they were later added to allow cars to be moved through tracks without rack rails during maintenance. The line was opened using steam traction on 4 June 1889 and was electrified on 15 May 1937, using an overhead electric supply of 1550 V DC.
The government provided no subsidy for the construction of the line. Instead, Locher established his own company "Locher Systems" to build the railway. The railway was built entirely with private capital and has remained financially viable throughout its life.