The European Commission yesterday found that although the payments made by the government to finance new vehicles and ticketing machines for Malta’s public transport system constitute a form of state aid, the payments were legitimate and are to continue to be allowed since they are compatible with common market rules.

An Urban Development and Roads Ministry spokesperson yesterday described the EC’s decision as “an endorsement and a clean bill of health on the way in which the government has been dealing with the Public Transport Authority.”

The Commission was following up a complaint from Unscheduled Bus Services, an association of companies operating private buses in Malta, which had been filed back in April 2005.

The Commission said yesterday it had examined the compensation granted by the government in exchange for the public service obligations it imposes on the bus owners belonging to the Public Transport Association and found that, based on criteria established by the European Court of Justice, the compensation does indeed fall under the state aid provisions of the Community competition rules.

“Instead of signing public service contracts, Malta had unilaterally imposed public service obligations on the bus operators of the Public Transport Association,” the Commission found yesterday. “In exchange, it pays the companies public service compensation,” it said, adding that such state aid would continue to be allowed.

The Commission added, “As the payments comply with the European rules on aid in the form of compensation for public service obligations in the field of transport, the Commission has decided to declare them compatible with the common market.”

In its complaint to the EC, Unscheduled Bus Services had argued that government subsidies given to public transport bus owners for investing in a new fleet of some 140 new buses, the exemption on registration tax on the newly-imported buses and compensation for the purchase of the new bus ticketing machines constituted an unfair advantage against its members, who sometimes find themselves in competition with off-duty public transportation bus drivers who are allowed to use their buses for private work when off duty.

Such matters, however, had been undertaken before Malta acceded to the European Union and as such, the Commission found it was “not competent to express an opinion on the public support paid to some transport companies to replace the vehicles in their fleet and install an electronic ticketing system, as this was granted before Malta joined the EU”.