Scottish bus operator McGill’s is not surprised with the concerns expressed by British firm National Express over the Maltese public transport service bid.
“This comes as no surprise to us. They will be evaluating the opportunity along the same lines as us and the reason it is an expensive concession to us would be the same reason that it’s expensive to National Express,” McGill’s chief executive, Ralph Roberts, told Times of Malta.
This means that the public purse would need to provide an unduly high amount of subsidy
He was asked to comment after it was revealed last week that National Express had written to Transport Minister Joe Mizzi to express its concerns on the sustainability of the bid issued by the government as it searches for a new public transport operator.
McGill’s, Scotland’s fourth-largest bus operator, pulled out of the race for the bid claiming “lack of openness” by the Maltese government. It said its requests for “basic and fundamental” information remained unanswered.
National Express sent a letter to Mr Mizzi who said he had passed it on to Transport Malta for a decision on whether there was anything that needed replying to.
National Express Group is a leading transport provider delivering services in the UK, North America, Germany, Spain and Morocco. Every year, more than 800 million journeys are made on its buses, trains, light rail services and coaches.
In the letter, National Express managing director, Andrew Cleaves, warned it would be “difficult, if not impossible” for any private organisation to successfully achieve the government’s aspirations at the price it was proposing.
Mr Cleaves expressed “serious doubts” on the viability of the public transport system as the government wanted it. We have closely assessed the expression of interest notice published on January 27 and I am very sorry to say that, in its current format, National Express would be unable to respond positively to that notice,” he told Mr Mizzi.
Sources said the viability and sustainability of the bid are being questioned because those interested are expected to commit more than €35 million to a concession, which will only return the same turnover per annum.
“This means that the public purse would need to provide an unduly high amount of subsidy to provide an adequate return to anyone willing to take on that gamble,” the sources said.
Arriva’s bad experience in Malta and its withdrawal from the island after sustaining losses of €70 million in just under three years made bidders more wary. This, the sources said, made international and reputable companies more suspicious when they saw Transport Malta’s and the government’s “procrastination” to provide vital information needed for the bid.
In a reaction to McGill’s decision to withdraw from the competition, the government said interested parties would be given replies to their queries by March 24, a fortnight before the bids have to be submitted on April 7.
mxuereb@timesofmalta.com