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Toll Holdings is defending its record in rail and is warning that new investment must be in the right places if rail is to survive.

Toll NZ chief executive David Jackson said the company has invested $265 million since arriving here.

"We have taken no dividends, we have improved the efficiencies, we have motivated staff and we have a business that is now viable," Mr Jackson said in the Business Herald.

"We have done a lot of this with fundamentally the same set of tools (people, rolling stock and assets) that we started with."

Tranz Rail was technically insolvent and its failure was imminent when Toll arrived. Toll took majority control of Tranz Rail in 2003 and now wholly owns it.

It was also recognised by both Toll and the Government that the network was in far worse condition than anyone had anticipated.

"We are prepared to invest more but require reasonable returns. We want a regime that puts tensions in place to achieve the most cost-effective outcome, that all stakeholders are accountable in this essential service to the country, and that a true, positive economic outcome is achieved.

"With limited funding, maximising value is critical."

He said the customer of rail services has been overlooked in the debate. A subsidy would benefit customers.

He said road transport in itself did not carry its full costs. There was no recognition of road operators receiving a subsidy but arguably they did.