When the bus service is nationalised in the New Year the government will take on less than €15 million in debt, Times of Malta has learnt.

The amount is substantially lower than the €50 million debt accumulated by transport company Arriva since 2011.

Sources said the share transfer agreement that will hand Arriva’s assets and liabilities to a newly-formed government company will be signed on Thursday.

The debt includes money owed to creditors on operational matters such as fuel purchases

Most of Arriva’s debts will be absorbed by its parent and sister companies after insistence by Transport Malta during “delicate talks” that have dragged on for the past four months, according to sources.

The debt that will be absorbed by the state includes money owed to creditors on operational matters such as fuel purchases. Arriva also has outstanding dues with Transport Malta that will be absorbed by the new company.

Assets include the buses and IT infrastructure, which sources said has to improve.

Arriva is a subsidiary of Deutsche Bahn, a German transport firm, and its ill-fated journey in Malta will come to a premature end just two-and-a-half years into a 10-year contract.

The company was awarded an exclusive licence to run the bus service but its operations have been dogged by problems from the very first day.

In its short-lived sojourn, the company lost money and during talks with the government on the introduction of new routes it had made it clear that it was not ready to invest in more buses to extend the network.

Transport Minister Joe Mizzi on Friday said the company had threatened with liquidation during talks, a scenario that would have left the country without buses to run the service. If Arriva liquidated the company, all assets would have been frozen and workers would have ended up unemployed.

Mr Mizzi said the deal with Arriva ensured the best possible outcome because it saved workers’ jobs and ensured the bus service could continue operating without hiccups.

The government is expected to run the bus service for an interim period until it finds another private operator.

No timeline has been given yet but Mr Mizzi has said that a call for expression of interests will be issued in the shortest time possible.

Any new operator will have to run the service on a revamped network drawn up by Transport Malta that took on board many commuter complaints.

The bus routes were criticised when the regulator engaged experts more than two years ago to draw up a network that formed the basis for the award of the tender to Arriva.

Substantial changes had to be made to the routes after 2011, which resulted in a higher subsidy payout to cover the additional kilometres that Arriva was requested to make.

The operational costs will now pass on to the government at least for the time being until a private operator is chosen to run the service.

ksansone@timesofmalta.com

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