The government has been legally advised that bus owners "had a legitimate expectation to continue operating the public transport service for a number of years", Transport Minister Austin Gatt told The Times Business, and had the government not offered them compensation as part of the reform of the transport system, a court would have ordered such compensation.
Furthermore, the compensation offered "is clearly benchmarked with what was being paid in the market for the licences involved," Dr Gatt said.
Dr Gatt was asked for his reaction to the criticism by Chamber of Commerce president Helga Ellul that the government's compensation package offered to the bus owners - worth €52.4 million - and since increased to €55 million - was far too generous.
"We are legally advised that bus owners had a legitimate expectation to continue operating the public transport service for a number of years. However this expectation could not be met as a result of changes in European regulations that came into effect on December 3, 2009.
"We are advised that should the government not compensate bus owners for the fact that their legitimate expectation is not met, a court of law would in any case require such compensation. This arises from European case law in comparable situations to the present public transport reform," Dr Gatt said.
The government initially offered bus owners €98,000 for old buses and €118,000 to the owners of low-floor buses - compensation which amounted to €52.4 million - as well as a 10-year job guarantee. This was rejected on Tuesday by the Public Transport Association, which requested additional funds.
An agreement was then reached late on Tuesday evening, when a final package of €55 million was agreed on.
Dr Gatt told The Times Business that he noted the Chamber of Commerce and Industry fully agrees that public transport reform is an important economic enabler and a stimulus for economic growth, while the absence of reform is a continued burden on the country's competitiveness "which we must overcome as soon as possible".
"The cost of public transport reform includes the cost of honouring legal obligations towards the operators that are being asked to stop providing the service in spite of a legitimate expectation they had to continue to do so at least for a number of more years.
"The compensation offered by the government is clearly benchmarked with what was being paid in the market for the licences involved. That, we believe, is reasonable," Dr Gatt said.
Dr Gatt said the 10-year job guarantee to bus owners - which Ms Ellul described as "unheard of in this day and age" - arises out of a requirement in the tender for the new bus operator.
"The bus operator is being obliged to employ former bus owners and former ATP employees and not to declare them redundant for the duration of the contract the operator will have, which is 10 years," he said.
Dr Gatt said that employment in the public sector is not being offered or considered for these bus owners.