Representatives of Spanish bus operator Autobuses de Leon are in Malta for talks on the privatisation of the public transport service, Times of Malta has learnt.
A spokeswoman for the ministry confirmed the Spanish company representatives were holding talks with the government “on their bid to operate the Maltese public transport service”. No details were given as to the nature of the talks.
The visit comes on the back of meetings held with Transport Minister Joe Mizzi in Spain last month.
Sources said Mr Mizzi and Transport Malta officials visited Spain to see for themselves the company’s technical capabilities and how it operated the bus service in the city of León.
Autobuses de Leon is a subsidiary of Alsa, which was bought out by leading UK transport company National Express.
The bus service in Malta was run by Anglo-German company Arriva until December but the firm faced financial difficulties just three years into its 10-year contract.
The government bought out the company and nationalised the service, which is now run by the State-owned Malta Public Transport Service. However, the government wants to re-privatise and, following a call for expressions of interest, opened discussions with Autobuses de Leon. Two other Maltese companies – Gozo First and Island Buses Malta – also filed bids to operate the service.
Asked when an agreement was expected, the ministry spokeswoman said the government would announce the decision “when the process is finalised”.
A major sticking point is expected to be the level of subsidy the government will fork out to sustain routes of high social value but no commercial viability. When Arriva started operating in 2011 the original subsidy agreed on contract had to be in the region of €6 million per year for the duration of the 10-year concession.
However, subsidies ballooned to €9.8 million in the first five months of operation alone, increasing to €10 million in 2012, the first full year of operations, as routes were changed to placate growing discontent among bus users.