‘We’re not going to be another Arriva’, says Scottish CEO

The chief executive of Scottish bus firm McGill's vowed that his company "was not going to be another Arriva" when the company was not being furnished with enough financial information for it to make a serious bid for Malta's public transport operation.

Ralph Roberts told MaltaToday that McGill's Bus Service, of Greenock, Scotland, demanded to know as much information as possible - namely the value of assets, liabilities, staff complement and their salaries, amongst other crucial information - before bidding on the expression of interest issued by Transport Malta.

Roberts said that even on the basis of his guesswork, McGill's was looking at an operation costing some €35 million with the expectation of an equal amount in turnover.

"At that kind of 1:1 gearing, you're looking at a very, very expensive business to run... you ask yourself why Transport Malta should have set such a high bar in the first place. On our part, everything has to be right before tying up so much of our own cash and assets for this business. We have a corporate social responsibility not to do anything that might harm our operation in Scotland," Roberts said.

The chief executive said that TM had not been forthcoming enough on the information it needed to make a serious bid within the next six weeks.

Roberts surmised, on details available from the share transfer from Arriva Malta to Transport Malta and its new public transport company, an estimated €20 million asset base and another €5 million needed for start-up capital and cash flow. He also said that a €10 million guarantee was required in the form of a letter of comfort.

"Seeing that we could expect €35 million in revenues over the years, we felt this was a very expensive business to run... I ask myself, why should I tie up €10 million of my assets? I would need at least €900,000 every year for the next decade or so to make good for that."

Arriva Malta sold its entire operation to Transport Malta at the start of 2014, leading to the creation of a nationalised public transport service.

Roberts said that the current EOI asks bidders to indicate whether they want to purchase the entire company and its asset base, or whether they are interested in acquiring an exclusive concession by forming a new company.

"Taking over the company means you have to know the total value of the current assets and liabilities and employees' salary - the company has now been operational since January, and the share transfer agreement from Arriva Malta only gives you the basis for guesswork," Roberts said."

Malta Public Transport Services Ltd absorbed €7.9 million in total debts when it took over Arriva Malta.

The government's call for expression of interests for the operation of the new bus service closes on 7 April.

Earlier yesterday, the Sunday Herald of Scotland reported Roberts saying that his "gut feeling" was that excessive state interference would prevent the firm from running a profitable service.

"Their first option was to have someone take over an effectively nationalised service and assume the assets and liabilities. While they made that clear up front, they didn't say what this amounted to, so we had no idea what the liabilities were, what the assets were, what the revenue was, or the patronage numbers," Roberts told the Sunday Herald.