Expression of interest for new bus operator to be issued next week

Fresh from putting pen to a share transfer agreement between Arriva and Transport Malta, Transport Minister Joe Mizzi said that a call for expressions of interest for Malta's next public transport operator would be issued in the coming week.

Speaking on PBS's Dissett, Mizzi insisted that the government did not pay anything for the transfer of Arriva's assets and furthermore, it would not pay Arriva anything during the transitional period.

"Arriva's €68 million in debt were solely incurred by the company. The government did not pay anything for this share transfer agreement," he stressed.

Earlier this evening Transport Malta and Arriva officially signed a share transfer agreement, subsequently confirming that a government-owned company would take over the public transport system. The agreement marks the end of the Arriva's tumultuous two and a half years in Malta and will see the government take over Arriva's assets including its vehicles, IT system, the Park and Ride facilities, its shares as well as its license.

Now the minister said, a call for expression of interest would be issued next week to find the next private operator of the country's public transport system.

"Apart from its vehicles and assets, the government will also incur Arriva's €3 million debt to creditors and its accruals," the minister argued while keeping mum on the amount of the accruals.

"However," he reiterated, "its €68 million in debts were borne solely by Arriva and not the government."

Minister Mizzi explained how Arriva had been losing close to €1 million per month and due to its mounting debts and financial difficulties it became apparent that the company's time was short-lived.

"Had it not been for the service's inefficiency and subsequent withdrawal of the bendy buses, the government would have still intervened due to Arriva's debts."

He explained that the watershed moment was when the government presented the bus operator with the new routes.

"After embarking on a consultancy with all stakeholders, back in October, the government presented Arriva its new bus route. Upon being presented with the new routes, Arriva asked the government to invest €45 million as it was not in a position to invest in the public transport."

Consequently, Mizzi explained, following months of fruitless negotiations, the best option was for the government to take over the public transport system. 

"During preliminary discussions, Arriva offered to sell for €30 million plus its debts, before quickly reducing this number by half. No way was the government going to pay this," Mizzi explained.

"Upon trading suggestions and further discussions, Arriva had asked for a €6 million payment during the transitory period. It was then that the government decided to scrap the idea and take over the transport system until a new operator is found."

Meanwhile, asked whether he had ever threatened Arriva to nationalise the company, the minister quashed the claims and insisted the government could not have afforded to nationalise the public transport system.

"Had the government nationalised the public transport, Arriva's vehicles would have been tied up in the liquidation process while its drivers' future would have ended up hanging in the balance."

On his part Reno Bugeja said that Mizzi's explanation in October that the government was prepared to take over the bus service, fuelled rumours that Arriva's ousting was long in the pipeline.

"The government has no prejudice. The government was simply prepared for anything when I said that."

"Tasked with the new transport system, the new state-owned company will increase efficiency," Mizzi reassured while quickly being shut down by Reno Bugeja who argued that this is a tall order given the mass inefficiencies by the previous private operator.

However, the minister insisted that he will not do any miracles and said that the situation of the public transport in Malta may quickly change.

"The government is aware that in order to ensure efficiency It had no choice but to subsidise the new operator," Mizzi explained while keeping mum on the government's possible expenses.

Turning his attention on the length of the transitory period, the minister said the government is committed to limit this to the least time possible and stressed that both Maltese as well as foreign operators are already showing interest to take over the Malta's public transport system.

Asked whether one of the specifications in the new contract will be for the new operator to use the fleet of Arriva busses, the minister failed to disclose the details, but said that the  "new operator will need them."

On the routes, Mizzi said that the new routes set by the government three months ago will be published in the expression of interest.