First Greater Western (FGW) has been given a 23-month extension to continue running services between the London, South West and Wales.
FGW will continue running trains out of London Paddington until September 2015 under the new deal, at which point the Department for Transport (DfT) has said another contract will be negotiated before a long-term franchise is let.
The DfT has said that the terms of the contract extension will require FGW to add two extra sleeper carriages between London and Cornwall, equip more trains with free Wi-Fi, maintain threatened services between Cornwall, Hereford, Weston-super-Mare, Bedwyn and Pewsey to London, and increase parking at Bristol Parkway station.
Since announcing a revised franchising schedule in the wake of the cancelled West Coast franchise, the DfT has given both Virgin and the National Express operator c2c franchise extensions to allow for long-term franchise agreements to be drawn up.
Transport Secretary Patrick McLoughlin said: “The Great Western franchise provides a vital service for thousands of passengers every day and under this deal they will see real benefits.
“For communities like Devon and Cornwall the train is a life-line bringing in business and helping secure the leisure industry the community relies upon. This agreement will provide additional sleeper carriages between London and Cornwall securing the future of a key service once under threat.
“We have also secured a commitment to deliver greater Wi-Fi coverage to improve the experience of long distance journeys for passengers. But I am also determined that we see further improvements during the lifetime of this contract; more standard class and fewer first class seats on key services and the delivery of more electric trains for the Thames Valley.”