The Department for Transport announced today that Stagecoach Group Plc had been awarded the contract to run the South Western franchise from 4th February 2007.

The franchise presently consists of services operated by South West Trains, which includes key commuter routes to London and the Island Line on the Isle of Wight. Both of these are currently operated by Stagecoach.

Mainline and suburban services will see a 20% increase in capacity, and more rolling stock will be added to the fleet.

By 2009 Smartcard technology will be introduced to the franchise area. There will also be changes in fare structures to create incentives to travel outside peak time. The current timetable will remain with only a few changes.

The franchise will provide £40 investment in enhancements at stations. This will allow Waterloo station to be gated along with 13 other stations in the area. Extra security measures will also be available, including more visible staff. More stations will also have Secure Stations accreditation.

Stagecoach will be paying the Department for Transport a premium of £1,191m NPV over the life of the franchise. The franchise will last ten years, the last three of which are dependent on the service “performance achieving preset targets, including further performance improvements.”

In a statement, Rail Minister Tom Harris said:

This is a good deal for passengers and a good deal for the taxpayer. We want to build upon improvements in reliability and the major investment in rolling stock on the South Western franchise.

Today's contract will mean that capacity will further increase and there will be more seats for many passengers on busy routes, with longer trains and extra services operating.

Passengers across the franchise area are set to be the first outside London to benefit from smart ticketing. Travellers will also see improved performance and more security measures at stations.