Go-Ahead retains rail franchise

Southern carries about 150 million passengers a year

The firm behind Southern rail has retained the right to run rail services in London and the South East.

Govia - a joint venture between Go-Ahead and French transport firm Keolis - retained the franchise, the first to be awarded since the recession began.

It pledged a 10% increase in train capacity by December 2013, including longer trains on peak-time services into London Victoria and Brighton.

Govia will pay the government £534m in premiums over the life of the new deal.

'Improved quality'

It has committed to spending £76m on trains and stations, and promised more car and bicycle parking at stations, improved security and greater punctuality.

Other planned improvements include new late-night services in south London, an hourly Brighton to Southampton train on Sundays and an extra Gatwick Express service from Brighton at peak times.

The franchise - which carries about 150 million passengers a year - has so far been supported by revenue subsidies from the Department for Transport.

"It will greatly improve the quality of service and give passengers better value for money," said Transport Secretary Andrew Adonis.

Govia also runs the Southeastern and London Midland franchises.

It predicts that the gloomy economic climate means there will be a 2% fall in its passenger numbers in the year to June 2010, and estimates that these will not recover to 2009 levels until June 2012.

Fares will rise annually by 1% above Retail Prices Index (RPI) inflation, Govia says.