Over €9 million in debts incurred by national transport operator

The government's new public transport company will be called Malta Public Transport Services Ltd, and has already incurred €3.2 million in creditors from Arriva Malta, and a possible €6 million in accrued debts that are yet to be audited.

Transport Minister Joe Mizzi today said that a €68 million debt incurred in Arriva Malta's operations was cancelled by parent company Deutsche Bahn.

Transport Malta chief executive James Piscopo said the new nationalized company will still be granted am €8.5 million public service obligation from the government.

"There will be a shortfall in operating cash flow, and the government will have to foot these losses, but I won't comment on the amount being estimated at the moment," Piscopo said.

The TM chief said that even had government been satisfied with Arriva Malta's performance - which took over public transport in 2011 - only a €2 million bond tied the company to the government. "By 2012, it had €22 million losses in operations alone - nothing kept it from staying here."

Mizzi said government's principle aim was to privatise public transport. He said that if there were no legal issues, the ministry would be publishing an expression of interest by the end of next week. "We will then see whether to issue a public tender or not," Mizzi said, without committing himself to this stage of tendering.

Under the new public transport system, the bus ticketing rate for non-residents in Malta will be removed - this arbitrary decision had caused particular discomfort for non-Maltese, EU residents in Malta.

The board of directors will be composed of ministerial advisor Alex Falzon, Transport Malta official Konrad Pulé, and Harold Bonnici from the finance ministry.

In a tweet, Prime Minister Joseph Muscat said the Nationalist government had attracted a warning from the European Commission on the price discrimination between residents and non-residents.

Removed public #transport resident/non-resident price discrimination.Legacy of previous government that landed us @EU_Commission warning-JM

— Joseph Muscat (@JosephMuscat_JM) January 3, 2014