The red minibuses' cooperative, which is threatening to take industrial action after its insurance premiums were raised, has warned that additional costs will be incurred by parents of children using school transport, by factory workers and tourists.
Co-op Services Limited chairman Charles Mercieca told The Times the cooperative did not wish to increase prices for patrons but warned that if insurance premiums were revised upwards, fares would inevitably go up especially if an increase in the price of diesel follows in the near future.
The controversy arose after 133 minibus licences expired on August 1 and their owners were told by the Motor Omnibus Pool, a consortium of insurance companies, that they had to pay 30 per cent more on insurance premiums.
Following talks between the Roads Ministry, the Malta Transport Authority, the Malta Financial Services Authority and the Malta Insurance Association, the increase was revised down to 15 per cent. This was still rejected by minibus owners, who have not paid their insurances so far and the 133 minibuses are therefore operating without a licence, Mr Mercieca said.
The 320 minibus owners, together with those of route buses, coaches and motorcycles used for hire, have to be insured by the Motor Omnibus Pool which involves all insurance companies which set up shop in Malta. It had been set up years ago because no individual insurance company was ready to cover individual vehicles by itself.
Mr Mercieca said red minibuses have a third-party-only cover.
"Minibuses have had a good claim record and I don't see why our premium should increase because route buses or coaches make many claims." he said.
Following meetings with the Roads Ministry, the cooperative was asked to pay the new premium until the issue was investigated. However, Mr Mercieca said the cooperative would not accept this as the same had been promised when premiums rose in 1999.
"We are prepared to pay the premium minus the increase. Once we are obliged to insure our vehicles with the pool and we are not allowed to shop around, we have a right to know why the premium has increased, in the name of transparency and accountability which this country boasts so much about," he said.
The cooperative is protesting that unlike route buses and private coaches, which pay a premium of Lm7.14 and Lm7.24 per seat respectively, red minibuses are charged Lm140 per year, which amounts to Lm10 per seat, plus 10 per cent stamp duty.
Roads Minister Jesmond Mugliett said the government was taking the minibus owners' claims seriously, adding that he did not feel that the Omnibus Pool could further reduce its 15 per cent increase.
A spokesman for the Ministry for Urban Development and Roads told The Times yesterday the ministry was not speaking "and has never spoken" to the Omnibus Pool on behalf of the minibus cooperative but was merely acting as "facilitator" between stakeholders involved.
The Times asked how the Omnibus Pool was justifying its claim for a 15 per cent increase in the minibuses' insurance premium and whether in the ministry's opinion of the concept of an insurance pool went against competition.
"The Ministry for Urban Development and Roads is not the competent authority on insurance matters or fair competition," the spokesman replied.
Mr Mercieca was of a different view. "We have had meetings with the ministry and nobody else. We only had one other meeting with the MFSA last May," he said, adding that the last meeting on the issue had been held at the Roads Ministry last Thursday.
Asked to comment on the ministry's claim that it was acting as a facilitator between stakeholders, Mr Mercieca said: "As such we do not need facilitators. After we got to know that our premiums had risen by 30 per cent, it was the ministry which spoke on our behalf and agreed that the increase was to be 15 per cent and not 30 per cent".
Meanwhile, the deadlock over the route buses' subsidies dispute between the government and the Public Transport Association has not been broken.
No talks were held yesterday and none are planned for the coming days as the government's Lm1.1 million offer for the financial year 2005 remains short of the bus owners' request.
In the meantime, most public transport routes stop running at 8 p.m. on weekdays, with the exception of routes 11, 19, 22, 45, 48, 49, 62 and 70 that run as usual.
Route 75 (the direct bus service linking towns and villages to St Luke's Hospital) has also been suspended, operating only the route from Valletta to the hospital.