Transport Minister Joe Mizzi has not ruled out Arriva's eventual departure from Malta as talks between the company and government continue.

"Every possibility exists," Mr Mizzi said this morning when asked whether the bus company, a subsidiary of Deutsche Bahn, had any future in Malta.

He said the company put forward "a proposal" that is currently being analysed by the government.

He did not elaborate on the proposal but Mr Mizzi said a final decision on the way forward was expected shortly.

Prime Minister Joseph Muscat also commented on the current situation when questioned later.

He said the talks between the two sides were frank but cordial. The government, he said, was saying which areas it was satisfied about, and which it was not.

He said the government saw no grounds for the return of the bendy buses, given that the traffic situation had improved without them.

"We have to see what we can achieve, what they can achieve and whether our relationship can continue," he said.

Asked whether the company would pull out, Dr Muscat said Arriva had to take its decisions. The government would take its own. What was certain was that the government was not happy with the current situation because the people were not being well served. That was why changes to the routes were being proposed. Decisions would be taken in the coming weeks.

Arriva is locked in talks with Transport Malta over route changes the government wants introduced in the next couple of months. Although the company has said it expected a positive outcome, sources have told timesofmalta.com that both sides are poles apart on the cost of the route changes.

The company's operations in Malta, which started in July 2011, have been dogged by numerous complaints and financial losses. Arriva is under pressure from its mother company to cut losses.

Mr Mizzi reiterated that the government had "plan B" if Arriva decided to pull out.

"Just like we found a stop-gap solution when bendy buses were pulled off the road and when schools re-opened, we will ensure the bus service will continue to be delivered," he insisted.

However, any such plan will only be a temporary measure until a long-term solution is found, he added.

"Our intention is to continue offering a service come what may," he said.

Asked whether the matter will be discussed at Cabinet level, Mr Mizzi was non- committal.

See also: Arriva could liquidate to escape from bus contract. http://www.timesofmalta.com/articles/view/20131028/local/Arriva-could-liquidate-to-escape-from-bus-contract.492225#.Um4icBAixOQ