1. Based on the long term of residence in the vicinity, all people can join together and file a PIL before the high court seeking its intervention to direct the Railways to allot the vacant land for formation of road through the local municipalities which will slve the easement issues. This is an easement by necessity and since the people living in the vicinity for over decades, they can even claim adverse possession for easement rights.
2. Since this is railway land, there is no provision in law for the private people or even the government agencies to occupy the railway land for any purpose including public utility.
3. If the Railway does that then you may have to approach high court with a suit for mandatory injunction agaisnt the railways to remove the blockade under law of adverse possession and law of easement rights.