Watchtower near Turukhansk, Part of 503rd Labour Camp Detailed map of Salekhard-Igarka railway. Sections built and abandoned in 1950-s shown in red.

Construction of the Salekhard–Igarka Railway began in the summer of 1949 under the supervision of Col. V.A. Barabanov. The 501st Labour Camp began work eastwards from Salekhard, while the 503rd Labour Camp pushed westwards from Igarka. Plans called for a single-track railway line with 28 stations and 106 sidings. It was not feasible to span the 2.3 km Ob River crossing or the 1.6 km wide Yenisei River crossing. Ferries were used in the summer, while in the winter, trains crossed the river using a track laid on the ice, using specially strengthened crossties.

A 1955 CIA paper detailed the construction method. After the course of the railway had been surveyed, a corduroy road was built over swampy ground. That was covered by layers of fascine, covered in turn by sand brought in by dump trucks. A 20-centimetre (7.9 in) layer of ballast was placed on the sand, and was topped by additional sand on which the crossties were emplaced. The line had many curves because of the need to avoid swamps.

It was estimated that anywhere from 80,000 to 120,000 labourers were engaged in the project. In the winter, construction was hampered by severe cold, permafrost, and food shortages. In the summer there were the problems of boggy terrain, diseases, and attacks by mosquitoes, gnats, midges, and horseflies. On the technical side, engineering problems included the difficulty of construction across permafrost, a poor logistical system, and tight deadlines, compounded by a severe lack of power machinery. As a result, railway embankments slowly settled into the marsh or were eroded by water pooling behind them. A shortage of materials also affected the project. One-metre segments of damaged rail lines from war-torn areas had to be sent in and welded to form 10-metre lengths.

As the project progressed, it became clear that there was little need for the railway. In 1952, officials permitted a reduced tempo of work. Construction was stopped in 1953 after Stalin's death. A total of 698 kilometres (434 mi) of railway were completed at an official cost of 260 million rubles, later estimated to be near 42 billion 1953 rubles (2.5% of total Soviet capital investment at the time, or about $10 billion in 1950 dollars). The project was quickly destroyed by frost heaves and structural failures arising from poor construction. At least 11 locomotives and 60,000 tons of metal were abandoned, and bridges gradually decayed or burned down. However, the corridor's telephone network remained in service until 1976.

About 350 km of track between Salekhard and Nadym remained in operation from the 1950s to the 1980s. However, in 1990, the line was shut down, and due to rising steel prices the first 92 km of rail from Salekhard were dismantled and recycled during the 1990s.