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Update 3 - Arriva bows out with share transfer agreement behind closed doors

New routes to be announced next week with call for expressions of interest

The first Arriva bus was unveiled during the signing of what was meant to be a 10-year agreement in November 2010. Arriva's service started in July 2011.

The first Arriva bus was unveiled during the signing of what was meant to be a 10-year agreement in November 2010. Arriva's service started in July 2011.

Arriva bowed out this afternoon with a share-transfer agreement for the nominal price of €1 in a ceremony for which the press was not invited.

The bus service is now being operated by a company wholly owned by Transport Malta, which has taken over Arriva's buses, IT system, the Park and Ride facilities and workforce and assumed responsibility for over €3m which Arriva owed creditors.

In a statement, Arriva said: We have considered every alternative together with Government representatives and have entered into long and detailed negotiations to try and find a satisfactory outcome for all parties. We believe that this decision will be in the best interests of all stakeholders and ensure continuation of the provision of bus services on Malta and Gozo for the travelling public.

"Services continue to operate as normal and, as part of the agreement, Arriva will provide operational management advice to the Government of Malta over the coming weeks to ensure a smooth transition for customers and employees."

The government is to issue a call for a new private company to operate the service.

Transport Minister Joe Mizzi interviewed on Dissett said Arriva had had a debt of €68 million which it had written off. (Most of the debt was with its parent company)

What was meant to be a 10-year agreement with Arriva was signed in November 2010 and the service was launched with celebratory fireworks in July 2011, but Arriva quickly ran into problems with a walk-out by drivers and complaints by users over the route network and lack of punctuality.

The routes were changed several times but problems - and losses - continued to mount for Arriva. The beginning of the end started in the summer when 68 bendy buses were withdrawn after fires on three of them.

ROUTES TO BE ANNOUNCED NEXT WEEK

Mr Mizzi said that the call for expressions of interest would be based on a new route network. Both the call and the proposed routes would be announced next week.

He said Arriva had been losing €1m per month and when talks started some months ago, Arriva had offered to sell for a price - €30m plus the debts - which the government rejected.

The company was unable to invest in order to meet the requirements of a new routes network and a mutual decision was taken for it to leave.

He said the bus service would be retained as at present during the transitional phase to the new operator.

Asked if the fares would be retained or raised, Mr Mizzi said fares would be retained during the transitional phase.  During the talks with the new operator he would continually keep in mind that the bus service was a social necessity and the fares had to be reasonable and affordable for all. Special fares for students and the elderly would be retained.

PARK AND RIDE

He said that even during the transitory period, Transport Malta would consider ways how people could be encouraged to start using the park and ride facilities once more. He was evasive over whether the service would be free of charge.

ARRANGEMENTS WITH KSU TO BE RETAINED

Meanwhile, KSU University Students' Council said it had had a meeting with Transport Malta and was pleased to have been given an assurance that all arrangements currently existing with Arriva would be retained during the transitory period.

Further talks would be held between KSU and Transport Malta to improve the bus service to the University.

 

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