With passenger numbers falling and the line extended to Nant Gwernol, the railway entered a period of consolidation. By 1987, the boiler on locomotive No. 6 "Douglas" was life expired and in need of replacement. Consideration was given to reviving the project to build a new locomotive from the components of "Irish Pete" instead of purchasing a new boiler for "Douglas" and in early 1988 work recommenced on the rebuilding of the ex-Bord na Mona locomotive. A new design for an 0-4-2 side tank locomotive was prepared by the railway's Chief Engineer John Bate, which reused the chassis and boiler from the locomotive with a new superstructure and the addition of trailing wheels, and the new locomotive, officially named "Tom Rolt" after the Preservation Society's first chairman, was put into service on 6 May 1991. During this period further expansions of both Tywyn Wharf and Pendre stations were undertaken and Abergynolwyn station, which had been rebuilt as part of the Nant Gwernol extension in the 1970s, was expanded further to provide an additional attraction at the eastern end of the line.