Bus fares are set to rise, despite the fact national subsidies for the new public transport system will almost triple under an agreement between the government and Spanish transport group Autobuses Urbanos de Leon (ALESA), The Sunday Times of Malta has learnt.
Sources at Transport Malta told this newspaper the deal has been “practically wrapped-up” and is expected to be formally signed by the end of this month.
When contacted, Transport Malta refused confirm that a deal had been struck with the Spanish company – stating only that “negotiations are still ongoing”.
However, The Sunday Times of Malta can reveal that ALESA, which currently operates the transport system in Spain’s northwest city of Leon, is expected to take over the running of the Maltese transport system from March.
A number of new vehicles will replace the ones currently being offered by various local private transport companies.
ALESA has already reached a separate deal with a Turkish firm that will supply the new buses.
According to the deal reached with the government, the Spanish company will be buying the State-owned Malta Public Transport Services for around €10 million with all its assets and liabilities and a due diligence exercise is currently under way.
Engineers and ALESA officials were in Malta last week to draw up evaluation reports on the state of the former Arriva buses currently used in the service.
In return, the Spanish company will be authorised to raise bus fares, although the exact price hike is still being calculated. It will also be receiving an annual subsidy of between €24 and €29 million.
Arriva, which stopped its operations in Malta last year after reporting massive losses, was not allowed to raise its fares and was entitled to a maximum government subsidy of €10 million a year.
Transport Malta sources told The Sunday Times of Malta that the government will continue to run the service until March, even though it is currently losing some €3.5 million a month.
Local, private coach companies will be allowed to keep leasing buses to the government for some €35,000 a day, however, their services will no longer be required as from March.
Spanish firm will receive annual subsidy of between €24 and €29 million
The future of 600 former Arriva employees who are temporarily employed by the State company running the service, however, is still unclear.
According to sources, while the government is insisting the new owners retain all the employees of Malta Public Transport Services when it buys the company, ALESA wants to be able to employ Spanish workers instead of Maltese staff.
The government has so far kept silent on the negotiations conducted with the Spanish company and has only announced ALESA as the preferred bidders.
However, Transport Minister Joe Mizzi and Transport Malta officials had visited the company in Spain before the official negotiations started.
This visit had raised eyebrows among the Opposition and the other local bidders, who deemed it inappropriate.
Opposition spokesman Anthony Bezzina claimed that Mr Mizzi’s visit breached the terms of the expression of interest as bidders were precluded from contacting the government.
Admitting that he visited the company, Mr Mizzi said that he wanted to verify some technical aspects of the Spanish bid.
The other two bidders for running the Maltese public transport service are Island Buses Malta Ltd – a consortium made up of eight local private coach firms and Gozo First – a Gozitan company interested only in running the service on the sister island.