THE Govia franchise London Midland has been extended by direct award until October 2017.
The news comes after protracted negotiations with the Department for Transport. The existing contract would have ended in April next year.
The new contract includes tougher performance targets and subsidies worth £130 million.
Govia has also undertaken to run two additional evening services each weekday from London to Trent Valley stations and earlier services to central Birmingham on Sundays from stations in the West Midlands such as Longbridge, Lichfield, Dorridge and Whitlocks End as well as Rugby and Coventry.
There will be an extra service between Watford Junction and St Albans Abbey, while free WiFi will be available on long-distance services between London Euston, Northampton, Birmingham, Crewe, Stoke and Liverpool. WiFi will have been be extended to all services by the time the next franchise starts in 2017.
Ticket machines will be improved, with more being installed at some stations, as well as additional car park spaces provided at Watford Junction, Hemel Hempstead and Tamworth.
London Midland will also install CCTV on cross-city Birmingham services, and be required to work with the Smart Cities Partnership to introduce smart ticketing on trains.
London Midland managing director Patrick Verwer said: "Winning this contract is a great endorsement by the DfT of how London Midland is focused on improving our passengers' journeys. Since 2007 we have invested nearly £300 million in trains and stations. Over the last two years we have significantly improved performance - cutting both delays and cancellations. Twelve months ago we delivered a further £60 million investment in 10 brand new trains. Last year we also introduced a new timetable, offering more seats and services than ever before into and out of major towns and cities and cut our Birmingham to London fares by up to 40 per cent.
"This new franchise offers some very exciting opportunities and will bring benefits touching every element of our passengers' journeys. It will enable us to continue delivering improvements for our customers and, as before, we remain committed to listening to our passengers and working with our stakeholders, communities and local elected representatives to make further improvements in the months ahead."
Go-Ahead Group, which owns 65 per cent of Govia, welcomed the news.
Its chief executive David Brown said: "We're pleased that the government has put its confidence in London Midland to continue operating the West Midlands franchise and also deliver further enhancements for passengers such as extra train services, free Wifi, and additional car parking at busy stations. The plans offer benefits for passengers, taxpayers and the local communities that are served."