Statement re First Great Western

Embargoed until 7:00am on Tuesday 26 February 2008

                         FIRSTGROUP PLC ("The Group")                          

  SUBSTANTIAL PACKAGE OF BENEFITS INCLUDING £29 MILLION INVESTMENT AGREED FOR  
                        FIRST GREAT WESTERN PASSENGERS                         

After discussions with the Department for Transport (DfT) First Great Western
(FGW), a subsidiary of FirstGroup plc, has today agreed a comprehensive package
of passenger benefits to address the poor performance in relation to
cancellations and the subsequent contravention of the Franchise Agreement.

The Group acknowledges that the performance of FGW has fallen short of its own
standards and the expectations of passengers. We are committed to improving
performance at FGW and taking the necessary action to ensure that cancellations
and delays are minimised. Following discussions with the DfT, we have agreed to
make additional investments to provide an enhanced service for passengers and
agreed a plan to improve operational performance.

The Group has invested more than £200 million in FGW since the start of the
franchise. Today's announcement commits a further £29 million to deliver
customer service and performance improvements including:

  * Increase rolling stock by leasing five additional Class 150 units to
    release Class 158 units for use in strengthening the Cardiff-Portsmouth
    service from May 2008 which will increase capacity by 40% on most services
    on this route.
   
  * A further £7m investment to enhance Customer Information Systems (CIS) at
    stations. This will bring our total investment in CIS to £15 million and
    provide improved consistency of systems, coverage of more stations and a
    greater capacity to provide information during times of disruption.
   
  * Additional investment of £5m on improvements to the London and Thames
    Valley fleet. A total of £6.1m will be invested in the London and Thames
    Valley fleet, including £1.1m already committed.
   
  * A commitment to increase the amount of compensation available under the
    Passenger's Charter by 50 per cent for claims arising between 27 January
    2009 and 26 January 2010. This is in addition to the doubling of the amount
    of compensation available to customers during 2008, announced in January.
   
  * The provision of an additional 500,000 FGW tickets at the most discounted
    rates to popular destinations for off peak travel. We will actively
    participate in the study and development of fares simplification proposals
    involving single journey pricing.
   
  * A £4m enhanced customer service training package for FGW's passenger facing
    employees.
   
In addition, we have developed and agreed a comprehensive plan to improve
performance and minimise delays and cancellations, including:

  * Recruit new drivers, guards and technicians to improve customer service and
    reliability. In addition, we have established a new performance directorate
    to improve management of disruption alongside Network Rail.
   
  * We have developed a package of additional fleet and depot improvements to
    enhance reliability. To ensure resilient operating performance, we will
    provide an additional high speed train.
   
Commenting, Moir Lockhead, Chief Executive said:

"This package of measures demonstrates our commitment to improving performance
and customer service in our First Great Western franchise (FGW). This
additional investment of £29 million will directly benefit FGW passengers and
underpins our plans to improve the quality and reliability of services we
provide. We have already put in place actions to address performance at FGW and
are encouraged that during January 2008 performance improved and cancellations
were at their lowest level for 18 months, a trend which has continued during
February. We are committed to the long-term development of railways in the UK
and look forward to sustained performance improvements at FGW in line with our
other three rail franchises.

All of the Group's operations in both the UK and North America are performing
well and are trading in line with expectations. Furthermore, since the Q3
Interim Management Statement on 9 January 2008 we have continued to actively
manage our fuel cost exposure by increasing the Group's fuel hedge position for
2008/09. We are now 100% hedged at approximately $76 per barrel for our total
UK requirement and 100% hedged at approximately $85 per barrel for the `at
risk' portion of our North American requirement. For 2009/10 we are currently
10% hedged for both our UK and North American requirement at approximately $85
per barrel."

Contacts
FirstGroup plc:

Moir Lockhead, Chief Executive
Nick Chevis, Finance Director
Rachael Borthwick, Group Corporate Communications Director

Tel: [phone]