Updated - Adds video interview

Transport Minister Joe Mizzi said this afternoon that the governemnt had not wished the problems with Arriva to reach the stage where the operator left the island, but there was no alternative to the agreement which the company had reached with Transport Malta.

Arriva is to hand over operations to Transport Malta on January 1.

Speaking at a press conference, Mr Mizzi said it could have been a lot worse, since the country risked being without a bus service. Arriva could have decided to liquidate the local company at any stage.

"We did not want this to happen," he said, and talks lasting several months had therefore been held.

He said the talks with Arriva were difficult. The original purpose was not for Arriva to leave , but it became evident very quickly that Arriva was not prepared to invest further. The company had then warned it could go for liquidation, a situation which would have meant that the buses could not be used.

The government, he said, had found itself subsidising a service that was not up to scratch and Arriva were losing money. It was a lose-lose situation.

People were promised a revolution and they got a confusion.

The situation got more complicated when bendy buses caught fire in the summer. 

Mr Mizzi said the government had started talks with Arriva to radically change the service and eventually it was agreed that Arriva would depart. 

A government company would take over the bus service on January 1 using the Arriva buses. Workers' jobs would be safeguarded.

The minister said that Arriva had to date been given €23 million in subsidies. He did not say how much the cost of the transfer of shares and assets to the new government company would cost. Financial details would be announced later.

The bus service, Mr Mizzi stressed, had to improve and this required more buses and more drivers.

The transition, he cautioned, would not be without hiccups. A team from Transport Malta and Arriva would continue running the service for a transition period.

Meanwhile, the government would also issue a call for expression of interest.

This, Mr Mizzi said, was not an easy situation and the governemnt was appealing for collaboration of the trade unions, workers, Transport Malta and commuters.

Replying to questions, the minister said the Arriva name would not continue to be used after January 1.

NO RETURN OF OLD BUSES

He said there would be no return to the old buses.

"We want to move forward, not backwards," Transport Malta chairman James Piscopo said.

Mr Mizzi said the difference in fares charged between Maltese and foreigners would be brought to an end.

The new bus operator, he said, would be selected on the basis of the new route network which Transport Malta intends to roll out.