OnTrack senior communications adviser Ruth Larsen, of Wellington, said the company "inherited a decade of deferred maintenance" when it bought the former TranzRail network from Toll New Zealand in 2004.
The Government had since budgeted $200 million for network improvements - half for renewals and half for upgrades - to clear the "maintenance backlog" by 2010.
In the 2009-10 financial year, more than 40 level crossings in the lower South Island, south of Ashburton, from small farm crossings to more major road crossings, will be upgraded.
In comparison, eight level crossings were upgraded in the 2003-04 financial year, she said.
Funding increases will please Waikouaiti residents Charles Galloway and Gerald Hight, who recently started a campaign to improve a crossing near their homes in Henry St.
They say the poor, unsealed road surface, trees blocking motorists' view of north-bound trains and road users who either ignore or do not see a compulsory stop sign combined to make the crossing "an accident waiting to happen".
Although road use is low there have been incidents on the crossing.
A woman was killed there the early 1980s.
A farmer recently stopped "just in time" at the crossing, at a goods train locomotive ripped the bull-bar from his four-wheel-drive vehicle, Mr Galloway said.
Several years ago he was distracted by his car radio approaching the crossing and had a "very close shave," as did the concrete truck which delivered material to Mr Hight's house, and did not see or hear an approaching train.
"From what OnTrack said, this is one crossing which train drivers don't like. There are about five sealed roads people could get to if it was closed. A small stock gate could be put in for pedestrians and stock."
OnTrack field engineer Robert Storm said the company was sympathetic to requests to investigate the crossing, but could only make a recommendation to the local authority, which had the final say on whether it was closed.
"It's not a nice one but there are worse. We have to investigate crossings relative to hundreds of others. The company is getting on top of maintenance at this sort of crossing but we were on the back foot for years."
