14 June 2006

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Business Today

Liberalisation talks reopen can of worms

Karl Schembri

Just a year ago, Transport Minister Jesmond Mugliett had declared that time was “running out” for bus owners as he set a deadline for 1 November 2005 to conclude a package of public transport reforms with them or else change bus operators.
With the deadline expired by seven months, the minister is now saying “the goalposts have shifted”, referring to Europe’s plans to liberalise public transport in a directive that would also ban government subsidies.
What is at stake is a yearly subsidy of up to Lm1.4 million to the Public Transport Association, which the minister steadfastly linked to public transport reform which, despite all the tough talk, never materialised.
Speaking about the subsidies request made by the bus drivers’ representatives for 2005, the minister said: “If we’re going to discuss the Lm1.4 million subsidies for this year, then we’re not ready to discuss it on its own. We will only discuss it in a wider and long-term framework. We wish to have a formal agreement for five years. We’re committed to discuss first with the association as stakeholder, and we’ll walk the extra mile to reach an agreement on public transport reform, but we’re not ready to be subjected to a lot of rigidity. If they’re unreasonable we’re committed to explore other alternatives, including other operators.”
A year later, with the bus service in the same rut, the minister is saying that the new EU will mean Malta would have to “introduce radical changes” or else it would have to “fully liberalise our public transport service”.
But according to association president Victor Spiteri, “the minister is just searching for a pretext” in the midst of negotiations to reform the service.
“In the last months we’ve been exploring alternatives that would separate the network into different groups, according to regions, so that we would be in line with EU regulations,” he said yesterday. “The minister knows this, because he had urged us to do so.”
According to Spiteri, splitting up the public transport network into distinct groups would still allow the government to issue direct orders to the association, which groups self-employed bus owners who have invested heavily in the service.
Anything short of that, for Spiteri’s association, would be a veritable u-turn on what they were pledged.
“We were promised that EU membership would not change our position,” Spiteri insisted. “Otherwise we wouldn’t have invested so much in our buses.”
What is likely to happen is that government may end up issuing a 10-year contract to an operator following a competitive tender – something which Spiteri’s association also wants to avoid.
“If we manage to devise this system of small networks, government would still be able to give a direct order to the association,” Spiteri said.
That is still something that has to be worked out following a thorough scrutiny of the impending EU regulations, although whether it would be in the commuters’ interest is another thing altogether. In the meantime, the bus services remains unreformed as the number of patrons decreases every year.

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