"We have taken appropriate steps to manage the problem and ensure the safety of staff and commuters: we simply would not run services if we suspected the network was not safe," Mr Quinn said.
He said the decay was believed to have been present in the timber when it arrived in New Zealand.
Some of the 7000 rotting sleepers were found with "advanced signs" of decay.
"Wooden sleepers are required to be compliant with the Australian standard, which specifies they must last for at least 15 years. However some are showing decay much sooner," Mr Quinn said.
"We have put in place extra inspections to monitor decay rates and are undertaking a replacement as required."
The two derailments were in February and March and did not cause any serious disruption.
There are about six million sleepers on the KiwiRail network.