TRANSPORT group Go-Ahead has had its franchise renewed to run the Southern rail service.

The Newcastle company holds a majority stake in Govia, which it operates with French transport firm Keolis, and was yesterday told it had kept the right to run trains in London and the South-East.

Under the franchise – the first to be awarded since the recession began – Govia has committed to provide ten per cent extra train capacity by December 2013, including longer trains on peak-time services into London Victoria and Brighton.

Southern trains currently carry about 150 million passengers a year.

Govia, which has run the franchise since 2001, and also has the Southeastern and London Midland franchises, is to spend £76m on trains and stations over the course of the deal.

Transport Secretary Lord Adonis said: ‘‘It will greatly improve the quality of service and give passengers better value for money.’’ Govia said it was expecting a two per cent fall in passenger numbers up until June next year in the bleak economic climate, estimating it will take until June 2012 to return to levels seen this year. The franchise has so far been supported by revenue subsidies from the Department for Transport (DfT), although the company will pay £534m to the DfT in premiums over the life of the deal.

Keith Ludeman, Go-Ahead chief executive and Govia chairman, said: “I’m delighted that the DfT has retained Govia to operate one of the UK’s most important and operationally complex rail franchises.

“The new franchise will deliver a comprehensive package of train, station and security investment, improved operational performance and innovative retailing.”