* Go-Ahead and Keolis JV retains London-south coast operator
* Go-Ahead shares up 0.8 percent
(Adds detail, reaction, shares)
LONDON, June 9 (Reuters) - Govia has won a six-year extension of its South Central rail franchise, which provides services south out of London, by promising longer commuter trains and more frequent services.
Britain's Department for Transport said on Tuesday the new franchise agreement, which runs from September until July 2015, could be extended by a further two years at its discretion.
Govia, which has operated the Southern franchise since 2001, is a joint venture 65 percent owned by British transport group Go-Ahead and 35 percent by Keolis, which is majority owned by French state rail group SNCF.
Govia, which also has the Southeastern and London Midland franchises, beat Stagecoach, National Express and Dutch operator NedRailways in the bidding process.
Go-Ahead said Southern, which runs a service between London Victoria and Gatwick Airport, was a commercially robust network.
The company said it expected underlying passenger numbers to fall about 2 percent in the next 12 months, but extra services and measures to stop fare dodging would help overall revenue grow about 4 percent a year over the next two years.
Go-Ahead shares, which have rallied 45 percent in the past three months, were up 0.8 percent at 1,337 pence at 0920 GMT.
Analyst Andrew Fitchie at Collins Stewart said his initial estimate of the value of Go-Ahead's share of the franchise was 60 pence a share, but margin growth and capex were still "sketchy".
He also said the upside was capped by the company having to share revenue with the government from day one but revenue protection did not kick in until the end of year four.
"This begs the question, is this enough of a reward for the asymmetric risk being taken?," he said in a note. (Reporting by Paul Sandle; Editing by Dan Lalor)