Transport Minister Steven Joyce has issued a public warning to KiwiRail to "do better".
The Labour Government bought TranzRail from Toll on July 1 last year for $690 million and in June this year PricewaterhouseCoopers valued the state owned enterprise, renamed KiwiRail, at $388.29m.
Yesterday on TV One's Q+A programme Mr Joyce said he would not have bought it.
KiwiRail received a $90m subsidy this year and has asked for a similar amount for the next five years. KiwiRail must run commercially because "we can't just keep tipping taxpayers' money in the back of it", Mr Joyce said.