The Strategic Rail Authority today assured passengers that vital improvements to the Brighton and Arun Valley line will go ahead as planned.

SRA chairman Richard Bowker gave the assurances after it was announced the Govia Company had missed out on a 20-year franchise to run the South Central rail route but would instead continue to run services for another seven years.

Under the new seven-year deal with the SRA Govia will keep the franchise to run busy commuter lines in Sussex and the South-East until December 2009.

It had been planned to make the new franchise last 20 years but the SRA said such a long franchise "could not satisfy its requirements for value for money and affordability".

The SRA also said the £1.5 billion of investment due on the line would be led by the SRA rather than by GoVia.

But Mr Bowker assured passengers that all the planned improvements, including major track upgrades on the main line to Brighton and the Arun Valley line in Sussex, would go ahead.

The decision on South Central had no bearing on whether the SRA would decide against a 20-year franchise for South West Trains, Mr Bowker said.

Two projects in East Sussex however - the electrification of the Ashford in Kent to Hastings line and the electrification of the Uckfield line in Sussex - would not be going ahead as the £150 million could not be justified.

New diesel trains would be introduced on these lines instead.

GoVia, which is part of the Go-Ahead Group, also runs Thameslink.

The company said the SRA planned to negotiate a new franchise for Thameslink to 2009.

GoVia added that both franchise extensions recognised the current uncertainties surrounding the north-to-south Thameslink 2000 project which, if completed, will speed journey times across London.

GoVia said there was a need for South Central and Thameslink to work closely together with the SRA in delivering the project.

Mr Bowker said: "Passengers on these busy routes can now look forward to the improved performance and better journey experiences that they have been promised.

"Today's agreement represents the grown-up, intelligent way of sorting things out that passengers expect from the rail industry - they want the problems to be fixed and the services to which they are entitled to be delivered. This agreement achieves that."

The South Central franchise operates primarily commuter services to London from Surrey and Sussex as well as services to Gatwick and Brighton and along the South Coast.

GoVia took over the South Central franchise in August 2001 from Connex, which still runs the South Eastern franchise.