Complex sentence: On January 2013 the government announced it would be exercising an option to extend the contract until March 2014, intending to negotiate with FirstGroup to operate the franchise on a management contract for up to two years.
Split into simpler sentences: On January 2013 the government announced it would be exercising an option to extend the contract until March 2014. It intends to negotiate with FirstGroup to operate the franchise on a management contract for up to two years.