Although Joe Mizzi, Minster for Transport, who is heading the Arriva ‘push-back’ will not divulge the cost for tax payers in wrapping up the contract with the British operator, workings made by experts for this newspaper indicate that the yearly subsidy could go up from the current €8 million to more than €16 million.

The calculations drawn up for The Malta Independent after several refusals by the minister to declare what the government will have to pay to operate the system include the subsidy already paid to Arriva which has already surged to €8 million from the €6 million established in the tender adjudication when Arriva won the bid.

The subsidy will also need to include the loss deriving from cheaper tickets to non residents since government had to back-track on such a policy established by the previous administration.

Another financial burden which now the government needs to carry in 2014 are the losses incurred by Arriva in 2013. 

However, experts in the field have defined the cost to subsidize the new routes Minister Mizzi has been talking of as the main contributor to the surge in public transport costs in 2014.

These new routes will not only add to the final cost due to increased mileage but also because of the increase in the number of buses engaged and the number of new drivers to be employed as indicated by the minister.

Sources close to Transport Malta revealed to this newspaper that the main bone of contention between government and Arriva boils down to the removal of bendy buses.

Arriva has claimed, behind closed doors, that the subsidy for each bendy bus based on the kilometers it covers on each route would need to be tripled during 2014 since it takes three ‘King Long’ buses on the road to cover the same trip by one bendy bus.

Now that the new ‘State-operated’ system will not include bendy buses, the government will need to cater for three instead of a long one, as road-cumbersome as bendy buses proved to be.

To top it all, the government will be buying back Arriva’s buses and the cost must be factored in the subsidy.

At this juncture and until Minister Mizzi reveals the cost for tax payers in removing Arriva, it is only pertinent to point out that the consortium which placed second when the public transport system was up for grabs had calculated that a subsidy in the region of €20 million each year would be more appropriate.

That consortium included Paramount, the company that now claims to be still interested in the public transport tender once this is published.

Instead of crunching the figures carefully, the previous Nationalist administration had chosen the Arriva €6 million bid which today clearly shows that is was based on fictitious timeframes unlikely to be met on the Maltese roads and high expectations on a sudden culture change amongst Maltese commuters in order to sustain a system based on inter-changers.  

In the meantime, in a press conference held yesterday, Minister Joe Mizzi was tight lipped on the price the government will be paying for Arriva’s take over and whether it will be covering its debts.

In comments to the media following a news conference at Mtarfa yesterday, Mr Mizzi said the contract with Arriva will be signed by the end of the month and further details will be given afterwards.

The government has secured the best agreement it could with Arriva, he said. The plan is to provide a service with the least possible cost but it needs to be efficient.

He noted that “a contingency plan was drawn up to cover all eventualities and a Transport Malta team is working with Arriva to have business as usual as from the beginning of January”.

An expression of interest has yet to be published.

Pressed for replies on how much the takeover will cost the country and whether money will be lost over this, Mr Mizzi said the government is making sure the island’s best interest is being safeguarded and among these is protecting the employees’ interest.

He pointed out that Arriva has €50 million in debt and the government has paid €23 million in subsidies since 2011.

While people were promised a state of the art service, he said, the public transport system that was delivered was in a state of confusion and clearly, people were not happy with the routes.

By October, Transport Malta had finalised the new routes following consultations with local councils and it soon became clear that Arriva was not in a position to cover these routes because more vehicles are necessary.

The routes will be the basis for negotiations on the new contract following the expression of interest.

“No company has been chosen so far,” Mr Mizzi stated.

At the same time he noted that as from January, Maltese citizens and foreigners will be paying the same fares. The issue had embarrassed the country before the EU as this is discriminatory and therefore will be corrected.

Subsidies will make good for the difference.