‘Subsidy-shy’ Chamber pours cold water over Alesa bus deal

The Chamber of Commerce has expressed dismay at news that new public transport operators Alesa will be paid a subsidy of between €24 million and €29 million for the new public service.

Malta’s national bus operation was nationalised in January 2014 after losses and network breakdowns drove Deutsche Bahn subsidiary Arriva Malta to the ground. Spanish operators Alesa are the successful bidders for the new operation.

“Whilst the importance of public transport reform is truly recognised, the Chamber fears that this outlay may recreate a ‘drydocks situation’ which the country eventually managed to successfully and bravely resolve,” the Chamber said in a statement.

“Besides the amount of subsidy involved, the situation is reminiscent of the drydocks because the country has, so far, never managed to adequately reform public transport and there are, of course, no guarantees the next attempt will be successful.”

The Chamber of Commerce also complained that the reported outlay was unlike its recommendation to its ‘Economic Vision for Malta’, which disagrees with infrastructural investment that increases debt-to-GDP levels.

“To consider the matter from a slightly different angle, it may be useful to place the total maximum subsidy of €29 million into perspective. The authorities have, to date, declined to offer compensation to Malta’s highest energy-dependent companies beyond the announced 25 per cent discount planned for March next year.

“At half of the subsidy cost promised to the bus operator, the authorities could have offered utility tariffs, equivalent to the EU average, to these companies, thereby providing a boost to the country’s export competitiveness and the safeguarding precious jobs in this challenging economic scenario.”

The Chamber said the government should “seriously reconsider its position” on the new transport reform. “If the reported figures are correct, the level of annual subsidy cannot be justified in terms of any derived national economic benefit.”