A First Great Western Intercity 125 powered train - Fraser Pithie.

FirstGroup will pay £32.5 million in premiums to run the Great Western route for two more years, despite having earlier walked away from a contract to run the line until 2015 to avoid payments of up to £800 million to the government.
 
The government hailed the new franchise agreement, which has been reached days an extension to its current franchise was due to expire on 12 Oct 2013 as "part of the continued successful roll out of the new rail franchising schedule".
 
The contract, a 23 month franchise to run commuter and long-distance services from London Paddington, also commits First to £150 million of works annually, which include building a new Reading rail depot and bearing some of the cost of implementing the new Inter City Express trains on the line.
 
While the state-owned Directly Operated Railways has been theoretically on standby, First was effectively able to negotiate terms as the sole bidder as the government handed out direct awards to incumbent train operators in the wake of the west coast mainline franchising fiasco.
 
First will negotiate a further 10 month contract before a long-term franchise is let in July 2016.
 
Tim O'Toole, chief executive of First, said, "The agreement with the Department for Transport (DfT) is good news for First Great Western passengers, taxpayers, and our shareholders as it provides continuity and consistency, building on the improvements our experienced team has already made over the last franchise period. We have seen significant improvements in customer satisfaction and punctuality, and working with the DfT we have delivered additional capacity on the busiest morning peak trains. As the UK's largest and most experienced rail operator we remain committed to maintaining a leading position in the market, and look forward to the rail re-franchising programme gathering pace in the coming months."
 
Unions denounced the deal.
 
The RMT general secretary, Bob Crow, said, "This is another twist of the rail franchising racket with a company running one of the worst performing services in the country given a free run to milk this vital intercity line for all it is worth for another two years. It is a scandal that the publicly run option was never considered for this franchise even though it would have saved the taxpayer a fortune."
 
The transport secretary, Patrick McLoughlin, said the franchise agreement would also secure the future of the sleeper service between London and Cornwall, and a commitment to deliver greater wireless internet coverage.
 
He said, "This agreement provides further proof that the government's new franchising schedule is on track, delivering value for money for the taxpayer, and supporting the ongoing multi-billion pound investment programme in our railways."
 
Gwyn Topham.