Figures issued by the Treasury show the value of KiwiRail has dropped by more than $200 million in four months.
According to the Treasury's valuation, KiwiRail is is now worth $448 million.
In July, the Government bought the operation from Toll for $690 million.
Former railways minister Richard Prebble says even the current value is too much, because of the "hundreds of millions of dollars" needed to upgrade the network.
A spokesperson for Finance Minister Michael Cullen says the price reflected the need to buy the monopoly rights from Toll.
