Arriva leaves Malta after accumulating significant losses after a difficult two and a half years
Malta: Arriva has left Malta after reaching agreement with the island’s government to take over its operation around two and a half years into what was to have been a 10-year contract.
“After careful consideration, agreement has been reached to transfer the whole of the shareholding of Arriva Malta to the Government of Malta, taking effect from January 2, 2014,” said the company in a statement.
“We have considered every alternative together with Government representatives and have entered into long and detailed negotiations to try and find a satisfactory outcome for all parties. We believe that this decision will be in the nest interests of all stakeholders and ensure continuation of the provision of bus services on Malta and Gozo for the travelling public.
“Services continue to operate as normal and, as part of the agreement, Arriva will provide operational management advice to the Government of Malta over the coming weeks to ensure a smooth transition for customers and employees.”
Arriva, owned by Deutsche Bahn, is one of the largest transport services organisations in Europe, employing some 55,900 people and delivering more than 1.5bn passenger journeys across more than a dozen countries.
Arriva Malta operated 264 buses including 172 King Longs and 10 Optare Solo hybrids bought new, and employed around 900 staff. Since it took over running the islands’ bus services in July 2011, there have been four Managing Directors, Keith Bastow, Dave Kaye, Richard Hall and most recently, Group Engineering Director Mark Bowd all of whom have had to deal with numerous challenges.
An early set back was the decision by around 180 bus drivers, many of whom had worked under the old ‘route bus’ regime, not to turn up for work once their new employer started operating. Arriva had to subcontract and initiate an intensive recruitment and training programme to cover the shortfall.
Deficiencies in the new route network agreed with the government have led to several revisions. Then in September last year the 68 former London Mercedes-Benz Citaro artics operated were taken off the road following three fires. Despite the buses meeting all safety requirements and their use being agreed before the contract started, the government refused to allow their reinstatement. Again, alternative provision had to be resourced to cover the shortfall.
Arriva’s subsidy, agreed with the government, assumed a dual ticket pricing policy where locals were eligible for a discounted fare on production of valid ID. Visitors paid more. Controversial, it led to numerous complaints and a European Union Commission inquiry as to whether it violated EU discrimination laws. A formal letter of complaint was sent to Malta early last year and fares for non-residents were finally reduced to match that of residents from January 6.
There has been a change of government since Arriva’s contract started and Transport Minister Joe Mizzi also wanted to introduce new routes which would require more buses and drivers. He claimed to local media that Arriva had lost €68m (£56.5m) in Malta.
Press reports suggest that the agreement with the government to takeover the assets doesn’t include the articulated buses. The Malta Independent says a nominal €1 fee was set for the transfer of shares. It says sources have told it that Arriva was losing €1.8m (£1.8m) a month. This is expected to rise to €2m (£1.7m) under government control, says the paper. A call for expressions of interest to take over the network is expected to be made public this week. Services are now being run by Malta Public Transport Services Ltd according to the Times of Malta.
