Far from cutting subsidies the new Arriva bus service cost public coffers €9.8 million in subsidies in the first five months of operation in 2011.

The company started operations in July that year amid public outcry over an inefficient service that prompted the transport authorities to change the routes in December at an additional cost.

The original subsidy agreed to when Arriva won the 10-year contract had to be in the region of €6 million per year for the duration of the contract.

But subsidies continued increasing to almost €10 million in 2012, the first full year of operations as the company made €21.5 million in ticket sales.

The revenue streams were not enough to offset the company’s expenses which led to a loss of €21.6 million in 2012.

The figures are found in the voluminous file laid on the table of the House this evening by Transport Minister Joe Mizzi as part of the share transfer agreement between Arriva and Malta Public Transport Services, a State company.

Mr Mizzi published all the documentation related to the agreement that saw the bus service nationalised on January 2, including Arriva’s annual reports and management accounts.

Management accounts for 2013 showed that Arriva was forecasting an operating loss of €4.3 million but actual transactions showed this to be grossly off mark: the company registered a loss of €18.7 million until November.

The accounts also showed the company to have liabilities totalling more than €70 million.

The numbers paint a bleak picture of a company that encountered big cash flow problems and was only kept afloat through loans advanced by the parent company Deutsch Bahn.

The government take-over by mutual consent staved off Arriva’s eventual liquidation that would have been a messy affair.

The agreement shows how the government paid €1 for the company’s shares and absorbed €7.9 million in trade debts as the mother company agreed to cancel out inter-company loans.

The agreement also stipulates that the State company is obliged to change or remove any reference to Arriva from employee uniforms a month after taking over the service. The State company is also obliged to modify the external appearance of the vehicles to distance them from the Arriva brand within a year.

The agreement also makes provisions for a three-month hand-over period during which three Arriva managers will be present in Malta as consultants to ensure a smooth transition.

ksansone@timesofmalta.com

See agreement in full on pdf below.