The government has announced that Hong Kong-based firm, MTR which operates the Hong Kong Metro, is to help run South West Trains in the UK alongside First Group for seven years.

Rail union RMT has said MTR, which will hold a 30% share, “is set to make a killing at the British taxpayer’s expense”.

The South West Trains services are currently run by Stagecoach. The firm said it had “submitted a strong bid” but was disappointed to be losing the franchise. South West Trains is the only franchise to have remained in the same hands since privatisation 21 years ago. Stagecoach’s chief executive Martin Griffiths said: “We are proud to have operated the network under the South West Trains brand for more than 20 years and we are disappointed that we have been unsuccessful in our bid for the new franchise.”

The DfT have said the new operators would oversee a £1.2bn investment to improve journeys for millions of train passengers. It said 22,000 extra seats would be added on services into London Waterloo on every morning peak, and 30,000 extra seats each evening peak. A fleet of 90 new trains has also been promised, providing more space for passengers on Reading, Windsor and London routes.

The franchise will change hands in August, midway through an extensive rebuild of Waterloo station. Tim O’Toole, FirstGroup chief executive said they were “delighted” their partnership with MTR had been chosen, and promised “passengers can look forward to new and better trains, more seats and services, quicker journey times, improved stations and more flexible fare options”.