Transport minister Nicol Stephen today welcomed the agreement. He said: 'Passengers can expect more reliable and customer-friendly train services. There will be significant investment in new trains, new rail lines and better stations. The deal creates a solid foundation for major improvements to Scotland's rail network.'
In addition, CCTV and customer information systems will be fitted to more than 250 trains within 3 years.
All services, including sleeper services and stations currently run by ScotRail will be retained. There will be no cuts to the current services.
Specific agreement has also been reached to provide services on the Larkhall to Milngavie and Stirling-Alloa-Kincardine lines when they are reopened, improved local services for Aberdeen and proposals for new late night and Glasgow public holiday services in the Strathclyde Passenger Transport area.
The new franchise will run for seven years with a possible extension for an extra three. The cost of the franchise over the next 7 years will be approximately£1.9bn.
Other improvements which have been agreed include:
-- Higher standards for performance, including tougher penalties for poor performance, a new quality regime for stations and trains, a dedicated team to resolve any disruption to services and a unique requirement for immediate action plans if anything goes wrong.
-- A programme of improvements for passengers at Stirling, Aberdeen, Haymarket and Glasgow Queen Street stations.
-- Improved punctuality and reliability of services to be delivered through the operation of 29 more reliable and better quality trains.
-- Increased capacity - the new trains will provide around 5,900 more seats throughout Scotland.
-- Improved passenger safety and comfort, including higher standards of cleanliness, security and travel information on trains and at stations.
-- Secure cycle parking facilities at every station and extra investment for car parking improvements at stations.
-- 21 existing trains on the SPT network will have their interiors refurbished.
-- Plans to reduce overcrowding so that no-one should have to wait more than 10 minutes for a seat.
-- Better measures to prevent ticketless travel and travel fraud.
The franchise will also allow extra services to be added as and when necessary at a reasonable cost to help deliver the Executive's future plans for the Scottish network.
Mary Dickson, managing director designate for First ScotRail, commented: 'We are delighted to have reached agreement in terms of the First ScotRail franchise. This new partnership marks a fresh start for Scotland's railways and an exciting time for First ScotRail.
'We are committed toimproving rail services across Scotland and are making a real investment in rail infrastructure to improve reliability, punctuality, performance and enhance customer service. Our commitment is founded upon our core values of safety, reliability, high quality, accessibility and personal service.
'Today's agreement sets tough standards, which we intend to meet through a programme of improvements that will be rolled out over the course of the franchise and we will be working hard from day one to ensure that the knowledge and experience we have is focused on improving performance across the network.
'We believe First is in a unique position to help deliver the executive's objectives and fully intend to work with all operators and other transport stakeholders to make integrated public transport a reality not just an ambition.'
Strategic Rail Authority chairman Richard Bowker said: 'Now that the SRA has, on behalf of the Scottish Executive, signed a new franchise with FirstGroup, there is in place an excellent set of future benefits for Scotland's rail passengers.
'These are the direct result of a hard fought franchise competition against a clear specification agreed with the executive. The new franchise complements other important developments affecting Scotland's railway such as the introduction of new and longer rolling stock and longer platforms, and sets a new standard for the delivery of rail services in Scotland.
'Throughout this whole process, the excellent working partnership arrangement between ourselves and the executive was a major contributor to the overall success in securing the deal.'
The franchise is one of the largest in the UK with more than 3000 kilometres of track, 650,000 train journeys a year and more than 300 stations to run. Glasgow Central and Edinburgh Waverley stations are run by Network Rail.
The SRA formally announced the preferred bidder to the Stock Exchange on 11 June.
Scottish ministers specify (by means of directions and guidance) and fund the ScotRail franchise. The Strategic Rail Authority acts as the procurement agent for the new rail franchise on the Scottish Executive's behalf and is a co-signatory to it with Strathclyde Passenger Transport and the train operator.
Following the secretary of state for transport's rail review, it is planned that Scottish ministers will have sole responsibility for securing future ScotRail franchises.
First Group plc is a UK based international transport company with a turnover of nearly£2.5bn a year, and some 62,000 employees throughout the UK and North America.