Public transport operator Arriva will be paid a subsidy of €10.6 million next year when previous bus owners were paid €9 million in their last full year of operations in 2010, a review of the Budget estimates shows.

Eight months after Arriva started operations, the subsidy has been increased to an average of €8 million per year

When the 10-year contract with Arriva was signed in November 2010, the bus company was to receive an average of €6.2 million per year in subsidies. Arriva started route operations in June last year.

The Transport Ministry had said the subsidy was fixed for the contract’s duration and was much less than the money paid to the previous bus owners.

However, eight months after Arriva started its operations, the subsidy has been increased to an average of €8 million per year.

This revision was noted by the National Audit Office in its report on the management of public finances released on Monday.

The NAO said “an addendum” to the original Arriva agreement was signed in April that increased the compensation owed by the Government to €79.8 million over the 10-year tenure.

The increase, amounting to approximately 29 per cent above what was originally agreed upon, was a result of substantial route changes requested by Transport Malta following complaints about the service.

Route planning was the responsibility of the Transport Ministry in the run-up to the public transport reform.

But it is unclear whether the subsidy Arriva will receive next year will be higher than the amount stipulated in the April agreement, since more route changes were implemented last month. The ministry did not provide details when asked for a breakdown of the budget for public service obligations – the term used instead of subsidies – under its remit.

In a break from past tradition, the Budget estimates did not distinguish between the different subsidies paid by the Government.

The Arriva subsidy falls under the same heading as subsidies for the Gozo ferry service, which is contractually limited to €1 million, and maritime transport that amounts to €349,000. When contacted, a ministry spokeswoman said: “Payments of public services obligations to the various service providers are made according to the contracts regulating the PSO which are in the public domain.”

However, the ministry would not comment when asked to confirm that Arriva will receive more than €10 million in subsidies next year.

ksansone@timesofmalta.com