STAGECOACH Group has announced that it has now signed a deal with the Strategic Rail Authority (SRA) for the South West Trains franchise.

This will come into effect on February 1, 2004, and is for a minimum term of three years, expiring on February 4, 2007.

According to Stagecoach chief executive Brian Souter, the agreement follows the one-year extension to the existing franchise agreed last year.

There is also an option to extend the deal for a further five years subject to the agreement of both parties.

Mr Souter has assured rail passengers that the new franchise agreement will provide an improved and cost effective service.

In a statement this week he states that Stagecoach Group is confident the agreement, covering the countryÕs biggest rail franchise, which includes the Waterloo-to-Alton line, will provide significant added benefits for passengers while reinforcing the positive financial prospects of the group, and that it will offer the right balance of risk and return, thereby delivering consistent value to shareholders.

According to Mr Souter, the franchise will place responsibility for funding and delivering infrastructure projects with the SRA, leaving South West Trains to focus on delivering a better train service to passengers.

Highlights of the new deal are to include:

The replacement of the Mark 1 trains with a new £645million pound fleet of modern Desiro trains, BritainÕs biggest order for new trains;

A comprehensive plan to improve punctuality, including making rolling stock route-specific, measures to boost rolling stock reliability, and timetable initiatives;

The refurbishment of the inner suburban 455 fleet to improve reliability and passenger comfort;

£6 million to fund on-going fleet reliability improvements;

Revenue and profit-sharing agreement with the SRA;

A commitment to carry out a repainting programme at 75 stations;

The introduction of new state-of-the art automatic ticket machines;

Continued funding for a number of recently introduced evening and late night services and for existing integrated transport initiatives such as bus links and small car schemes;

Continuation of the PassengersÕ Panel.

Mr Souter is delighted to have signed the new South West Trains deal, viewing it as Òa major step forwardÓ.

ÒIt is an excellent deal for government, our passengers, our shareholders and our people. We are confident the terms of the new deal will allow us to generate a stable and predictable return for our shareholders over the life of the franchise,Ó he said.

Commenting on the announcement, Alton Line UsersÕ Association (ALUA) chairman, Chris Campbell, said he was pleased to hear the news but disappointed that the franchise period had been cut from 20 years to four.

One plus has been the reinstatement in May this year of the half hourly off-peak service on the Waterloo-to-Alton line which, says Mr Campbell, has increased passenger journeys from Alton by more than 100 a day.

ÒIt has really stood SWT in good stead,Ó he said.

ALUAÕs concern is, however, that the curtailed franchise has resulted in the loss of some services, in particular the bus/train link between Alton and Winchester.

According to Mr Campbell a growing number of complaints have been received from local rail passengers about the bus service which linked Alton and Winchester rail stations.

Erosion of the X64 service began in March 2000 when part of the route to Southampton was dropped and continued in October/November last year with discontinuation of the off-peak bus service to Alton. The bus now runs between Winchester and Alresford, leaving Alton passengers will no bus link other than at peak times.

ALUA has set up a meeting with Hampshire County Council officers this week to try and reinstate the service.

Another concern is for the future of works at Farnham sidings, needed to accommodate the new Desiro trains. And that Stagecoach/SWT should not lose sight of the need for reinstatement of double track working past the Farnham sidings bottleneck towards Wrecclesham bridge to improve reliability for extra freight trains for the oil terminal and the recycling plant due to become operation from Holybourne within the next six to nine months.