FirstGroup, the FTSE 250 transport company, confirmed the extension of the First Great Western franchise after the Department for Transport (DfT) binned the bidding competition and awarded the company an extension.

The 15-year franchise, which operates the Great Western service between London and Bristol and Cardiff, had been due to run out on March 31st.

The company, which in now in talks with the DfT to extend the contract for a further two years beyond October 2013, said the move will provide continuity and consistency for its passengers.

Tim O'Toole, Chief Executive said: "The extension of First Great Western and First Capital Connect provides continuity and consistency for our passengers and enables us to continue to deliver considerable improvements to services. At both these franchises everyone has worked tirelessly to enhance services and we have a record of successfully delivering major projects, working together with government and our industry partners.

"We have also taken significant steps to tackle overcrowding, although there is still much to do on these routes which are among the most congested in the country. Today's announcement will also allow us to work closely with the DfT and our industry partners to deliver the much needed new capacity as efficiently and effectively as possible."

Those short-listed for the franchise - National Express, Stagecoach and Arriva - could now be eligible for a refund from the government.

"These plans mark an important step on the way to restarting the franchising programme, and while I am determined this should happen as quickly as possible we do need time to get this right," Transport Secretary Patrick McLoughlin commented.

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