Local councils are charged hefty hourly fees for the provision of warden services, with standard rates starting from €18 going up to €23.30 per hour, yet the wardens themselves only earn up to €5 per hour.
A contract between a regional joint committee and The Guard and Warden Service House Ltd seen by The Sunday Times states that if local councils reduce the weekly hours of service, the fees increase to ensure a satisfactory return for the company.
On the other hand, the rates are lowered if the councils request more hours than those listed in the agreement. On Sundays and public holidays, the charges increase.
The services, managed by the various local councils' joint committees, also include the provision and installation of speed cameras. Under the agreement, the contractor receives the majority of the revenue from speeding fines though it has to foot the bill for installation and maintenance.
The Guard and Warden Service House Ltd provides local enforcement services at similar rates to six out of nine joint committees.
When contacted, Kenneth De Martino, chief executive of KDM Group, of which The Guard and Warden Service House Ltd is a subsidiary, said: "We were successful because we believed in the system and we invested in equipment, vehicles, computers, software and people," he said.
The company is also responsible for the installation, operation and maintenance of speed cameras. While motorists have accused the Malta Transport Authority (ADT) of using cameras to solve cash flow problems, it transpires that the ADT actually gets a minimal portion of the revenue.
For the duration of the five-year contract, speeding fines are established at €69.90 per ticket. In the first year, the income is shared as follows: 66.6 per cent to the company and 33.3 per cent to the local council. From its share, the local council has to pay €11.65 per ticket to the ADT. It also has to reimburse the contractor the cost of postage at the rate of 15c for every valid speed camera ticket issued.
For six months of the next year, the share of revenue for local councils increases to 40 per cent, and then to 46.6 per cent in the following six months. Thereafter, the revenue is shared equally.
However, the large majority of speeding fines are issued in the first three to four months of a camera's operation, making the company the main beneficiary.
Mr De Martino confirmed that his company generated good revenue in the initial months that speed cameras are installed and their percentage of revenue decreased as income fell. But, he said, this was fair due to the investment made by the company: "The first three to four months are healthy from a commercial point of view but after that the revenue from speed cameras dies; yet the level of service remains," Mr De Martino said.
"The cost base is phenomenal. We made a great investment in equipment, support services and licensing fees.
"Cameras also need to be calibrated every 12 months, which means I have to send the equipment overseas to laboratories accredited by the EU and accepted by the Malta Standards Authority for inspection and calibration."
Mr De Martino insisted that his company provided a service and had no control over the number of speed cameras installed or their location and speed limit. Before the privatisation of traffic management, enforcement fell exclusively within the competence of the police.
Now, as well as The Guard and Warden Service House Ltd, another company - Sterling Security - provides local enforcement services to the two joint committees grouping 14 local councils in the south of Malta.