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3 News maltatoday, WEDNESDAY, 22 JANUARY 2014 By 2012, Arriva was looking at €75 million in contract losses PAGE 1 The financial statements tabled in the House of Representatives, submitted on 2 January 2014 by PricewaterhouseCoopers, paint a dismal picture of the state of the public transport operator. Arriva actually expected to see revenue streams stabilise in 2014, with revenue growing annually by 8.2% in 2015 and 2016, and fuel costs decreasing. But by 2012, it had already amassed €75.6 million in contract losses. Arriva Malta was granted the concession agreement for the operation of Malta's public transport system in November 2010. On 3 July 2011, the company officially commenced operations. But during this period, the company face a number of organisational issues which impacted both its operational controls and financial reporting, with the transition to the new bus network demanding the recruitment of some 1,000 staff and over 300 buses. The company entered into a €35 million loan agreement with DB Logistics to purchased 264 buses. Apart from wildcat strikes on the first day of operations, various changes were made by Transport Malta to the originally awarded bus route system. This led to a new quantification of the size of the bus network and supporting resources. In 2011, Arriva raked in €14 million in sales but the losses amounted to €15.8 million, leading to parent company Deutsche Bahn extending a €40 million overdraft facility. Of the €14 million in revenue, only €4 million were ticket sales. Ticket sales increased massively to €21 million in 2012, showing increased bus patronage, bringing revenue up to €31 million with the public concession. The group increased the company's share capi- tal through a cash injection of €20 million, but despite this investment the business continued to trade unprofitably and there was a substantial loss in 2012. This caused the directors to impair the company's fixed asset value by €23.5 million and post a €75.7 million contract loss provision. Before these exceptional items, the company incurred a loss of €21.6 million, and as at 31 December 2012, the company had net current liabilities of €32 million and net total liabilities of €116 million. In 2013, patronage actually rose by 10% thanks to improvements in quality and performance, but when four bendy buses were damaged by fire in August 2013, Transport Malta ordered the withdrawal of Arriva's 75 bendy buses, resulting in higher costs to subcontract the Unscheduled Bus Service to provide third-party buses. The decision affected 25% of Arriva's fleet, leading to the sub-contraction of 64 coaches. Eventually this led to the government entering into an agreement with the Deutsche Bahn AG Group to transfer the entire company to Transport Malta and a new national company. Gozo constituted bodies reveal works have started on Gozo airstrip PREPARATORY works in connection with an airstrip at Gozo have commenced, according to the Gozo Tourism Association and the Gozo Business Chamber. Although questions sent to the Ministry for Gozo requesting further detail on the airstrip project remained unanswered by the time this paper went to print, MaltaToday is informed that preparatory works include the clearing out of the area next to the existent airstrip at the Xewkija heliport. Both the GTA and GBC said they were in favour of an air link that would increase the connectivity between the sister islands and accessibility to Gozo. "Such an investment will not only offer an inter-island scheduled service for locals and tourists visiting the islands, but it will also offer the possibility of opening direct routes to Gozo from Schengen countries in the region," they said. "The future of the tourism industry on Gozo relies more than ever on additional connectivity to reach the island. Thus the availability of an air link, will keep the Island of Gozo competitively marketable with so many emerging, destinations worldwide." They said that Gozo, as a distinct island tourist destination, can be competitive if there are reliable, consistent, effective and cost sensitive types of connections from and to the mainland and from the outside world. "Both the Gozo Tourism Association and the Gozo Business Chamber take this opportunity to encourage the Ministry for Gozo to continue seeking the common good in favour of our island... Gozo." Before the general election, Joseph Muscat declared that an airstrip in Gozo will not be a "priority" for the Labour government. But three months ago, a spokesperson for Gozo Minister Anton Refalo confirmed that the development of an airstrip was being actively considered. On 11 October, ETC board chairman Alfred Grixti announced that Google Maps image of the existing Xewkija heliport discussions with an Italian company had started on an air link between Malta, Gozo and Sicily. The announcement had been made during an ETC board meeting held in Gozo in the presence of Gozo Minister Anton Refalo. At the time, a spokesperson for the Gozo Minister had confirmed that while no final decision has been taken however "all options are under consideration, includ- ing that of an airstrip". "Any course of action will be undertaken with the full involvement of all stakeholders, including the public in general," the spokesperson had then said.

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