CIE is seeking to cut its over heads by almost 10 per cent through spending reviews underway at its three main subsidiaries. Outside consultants and management at Iarnrod Eireann, Bus Eireann and Dublin Bus have been asked to identify savings of at least £30 million Payroll costs are likely to be the major target and unions at the State company have warned that concessions will be needed before any flexibility is shown.

The review process is most advanced at Bus Eireann where the consultant Mr Bernard Somers has been working since last year. Mr Somers has identified the potential for savings in excess of £7 million and is now working on proposals to implement them.

The proposals for Bus Eireann that have been put to the unions to date involve overtime cuts, but no provision for voluntary redundancies or payments to compensate for future loss of earnings, said Mr Ken Fleming, SIPTU branch secretary at CIE. "There will be no payroll cuts without some concessions," he warned.

A similar stance is likely to be adopted by the unions over Iarnrod Eireann, where the consultant, Mr Mr Leslie Buckley, has been asked to find savings of at least £10 million, and also at Dublin Bus were an internal review is seeking cuts of more than £7 million in operating costs.

Further savings will be made at group level.

There was no question of precedents being set at Bus Eireann that management might then try and implement throughout the group, said Mr Fleming. He accused the board of CIE of trying to aggravate the problems at Bus Eireann in order to force the workers into accepting a restructuring deal.

Mr Fleming pointed to a decision by the CIE board to reduce by £3 million the bus company's share of CIE's annual £100 million subvention.

Mr Fleming said that the unions accepted that the situation at CIE was now so grave that there would have to be some restructuring. However, it would not happen unless there is some compensation.

The management of CIE is understood to be keen to avoid incurring large restructuring costs. It favours a piecemeal approach to restructuring rather than the development of a overall plan as in the case of the ESB cost and competitiveness review.

The company is keen to play down the prospect of job losses, even though some middle management jobs are almost certain to go.

Mr Fleming said that SIPTU was cot interested in secret negotiations which would result in an agreement being dropped on the employees".

SIPTU represents the bulk of the 10,500 employees of CIE, with most of the remainder represented by the National Bus and Rail Union.

The unions at Bus Eireann are due to meet management next week in what could be the start of a period of industrial tension at the State transport company.

The unions will be told that CIE cannot borrow any more money and that the funds needed for the investment required to secure the company's future can only come from cost savings.

Mr Fleming said SIPTU would be strongly opposed to any proposals to sell off profitable parts of the group, such as the catering division, Network Catering, or the travel subsidiary, CIE tours. It would also oppose attempts to spin off chronically loss making activities such as the maintenance of the railway infrastructure, which is funded out of the annual subvention.