Firstgroup signs contract with DfT to upgrade First Great Western rail

LONDON (ShareCast) - Firstgroup (LSE: FGP.L - news) has made a deal with the Department for Transport (DfT) to operate the First Great Western rail franchise until 1 April, 2019. The deal could be extended an extra year if the department sees fit and will involve the largest fleet upgrade seen on that route in a generation.

The upgrade will mean faster, more comfortable trains equipped with free wifi, bike storage, accessibility and other new amenities, according to an investor note released on Monday.

Commuter markets based in Bristol, Exeter, Oxford and Gatwick will all be positively affected by the increased capacity. There should be 16% more peak-time seats in and out of London Paddington station according to the note.

The deal will also incorporate a £2.2m fund to target station and train service improvements around areas of social need and lower income communities.

Chief executive Tim O'Toole noted: "As the proud operators of this important franchise, we will be using our unrivalled knowledge and experience of the network to help deliver significant upgrades over the next few years, in particular the introduction of new trains as the mainline is electrified.

"We are already working closely with the DfT and Network Rail to deliver the initial phases of the £7.5bn Great Western Mainline modernisation programme. This investment is the biggest on the route since Brunel, and will transform a key part of the country's transport infrastructure.

"Under our experienced management, the franchise will see new or refurbished trains on every part of the network, resulting in more frequent and faster journeys and an increase in the number of seats. These, and a range of further passenger benefits, will keep people moving and communities prospering across the Great Western network."