Comment by limagnolia

By building the initial rails cheaply, they could then bring in equipment and supplies over those rails to rebuild the railroad to a much better quality, and at a lower cost than if they had to bring that equipment and supplies in without the rails in the first instance.

That doesn't mean they always actually invested the money to rebuild properly... but it was sound engineering theory.

Of course, there were other financial shenanigans too- see https://en.wikipedia.org/wiki/Cr%C3%A9dit_Mobilier_scandal