The future of public transport operator Arriva rests on the outcome of deadlocked discussions over new bus routes, The Sunday Times of Malta has learnt.

During recent talks with the transport authorities, executives from the company made it known it could pull out of Malta if it continued to face serious losses.

The transport operator has already reportedly gone under by €35 million since it started operating in Malta in 2011 and is looking at ending this year with losses comparable to the previous two years.

The prospect of quitting the island was raised during talks between the Arriva and transport authorities on the revision of bus routes and the permanent phasing out of bendy buses.

The Government has asked to alter Arriva’s contract to add a number of routes to the current ones, following a public consultation on the service earlier this year.

The changes would add one million kilometres to Arriva’s current journeys but while the Government is prepared to pay for the extra routes, the two sides differ over the cost of the additions.

Last week, Transport Minister Joe Mizzi did not hide the fact there was a chasm between the two sides. “It appears that we have a problem. Actually, there are a number of problems,” Mr Mizzi said, acknowledging that his plans to launch the new routes had been thwarted.

When asked to confirm or deny that Arriva had threatened to pull out, the ministry said it was not prudent to comment at such a delicate stage of negotiations.

Arriva said: “We are engaged in talks with the Transport Ministry regarding a number of issues, including funding for the new network and phasing out of the bendy buses.

“Those talks have not yet reached a conclusion.”

When pressed to confirm or deny the information, no response was forthcoming.

Sources close to negotiations, however, confirmed the issue was raised during recent meetings.

“The company is coming under increased pressure from its German owner, the transport giant Deutsche Bahn, which is concerned about the reputational exposure from the Maltese operation.

At the same time, from their perspective, they are being asked to do more, with relatively less,” the source said.

The new routes are meant to ensure better punctuality, with more buses added to areas where they are needed and reduced where patronage is low.

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.

But eight months into the contract, which came into force in July 2011, Arriva’s subsidy had already increased to an average of €8 million per year.

This was a result of substantial route changes requested by Transport Malta after widespread complaints.