VICTORIA is still struggling to boost its volume of rail freight despite spending millions of dollars upgrading lines during the past two years.

The Victorian Government has fallen short of its target of 30 per cent of freight to port on rail by 2010.

A rail freight lobby group says freight on rail has dropped to less than 10 per cent, despite the Government spending more than $215 million on buying back the lines and upgrading hundreds of kilometres of track.

The Government has upgraded the lion's share of the gold and silver lines as identified in the Rail Freight Network Review by former Deputy Prime Minister Tim Fischer, two years ago.

Australian Centre for the Governance and Management of Urban Transport deputy director Bill Russell praised the Government for upgrading the lines, but said freight on rail had dropped from about 14 per cent in 2007 to less than 10 per cent.

He blamed the problem on a complex access regime, level crossing speeds, ageing rolling stock and the lack of a unified body to promote rail freight.

Government spokesman Stephen Moynihan said while a specific unit had not been established, "an ongoing dialogue between government, track managers and rail users, including the grain industry, has been in place since the review reported."

Mr Moynihan said the Government had introduced a two-year freight support package to "reduce the effective rail access fees to a minimal level."

He said the Government had asked the Essential Services Commission to review the rail access regime.

Prof Russell said the Government should assist private companies to buy rolling stock by providing finance, or buy the rolling stock for them.

Alliance of Councils for Rail Freight Development spokesman Vern Knight said there was a shortage of rolling stock with GrainCorp having four trains and AWB two.

Cr Knight said some of the locomotives were more than 30 years old and the policy framework did not encourage investment.

Mr Moynihan said there were now a number of operators prepared to offer rail services which provided "a more competitive and healthy environment for rail."