Rail unions demanded to know yesterday why ministers have gifted failing privateer First Great Western (FGW) a franchise extension when a publicly run operation could have “saved taxpayers a fortune.”

The company was rewarded with a 23-month extension even though it’s one of Britain’s worst performing train operators.

The firm promised better wifi coverage and more sleeper carriages on their services between London, the south-west of England and south Wales.

But FGW service standards have fallen substantially below the national average over the past year.

Nine per cent of its trains ran late between August 2012 and 2013 - trailing the publicly run East Coast Mainline by more than 2 per cent.

Services have arrived at platforms on time on even fewer occasions during 2013/14 and the it remains among Britain’s worst performing franchises.

RMT rail union leader Bob Crow slammed the decision to give FGW a “free run to milk this vital inter-city line for all it is worth for another two years.”

He said: “We are demanding to know just how much First extracted from the government in last-ditch talks where they had bullied themselves into a monopoly provider position.

“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 union pledged to press bosses for fair pay and an end to staff casualisation following the deal.

FGW chief executive Tim O’Toole celebrated the deal as “good news for passengers, taxpayers and our shareholders as it provides continuity and consistency.”

And Tory Transport Secretary Patrick McLoughlin said the deal showed the government was “delivering value for money for the taxpayers” and claimed passengers would “see real benefits.”

But TSSA rail union leader Manuel Cortes warned Mr O’Toole’s company was “being rewarded for failure on a massive scale.”

The union revealed that FGW walk-on fares have soared by 210 per cent since privatisation, rising three times faster than inflation despite the firm’s poor punctuality record.

Mr Cortes pointed out FGW was “also the first rail firm to provoke a strike by passengers in the entire history of the railways, in protest at overcrowding in the Bristol region.

“Passengers will continue to suffer from Tory dogma while Patrick McLoughlin, like the Bourbons, seems determined to ignore the lessons of history.”

Tory Welsh Secretary David Jones welcomed the franchise deal but Welsh Assembly members for Plaid Cymru said it was obvious the government “doesn’t have a long-term plan” for the route.

Rhodri Glyn Thomas AM said the Welsh government should be involved in future deals that “allow alternative models such as social and public ownership to be explored.”

The Welsh government did not reply to a request for comment.