Concession of a 20 per cent pay claim to drivers at Dublin Bus could cost the parent company CIE £70 million when knock-on claims from other staff and ancillary costs are taken into account.
The estimate comes from informed transport industry sources as the public braces itself for disputes at Dublin Bus, Bus Eireann and the DART service.
The IBEC director, Mr Tulough O'Sullivan, yesterday called on the National Bus and Railworkers Union to withdraw its pay claim "for such an excessive increase in pay". He said the knock-on effect on CIE's pay bill alone would bring the total cost to £50 million.
However, transport industry sources estimated that the overall cost would rise to £70 million when ancillary cost increases were included. This would represent an increase of more than 20 per cent in CIE's operating costs.
It could also plunge the group back into the red. Last year it made a modest surplus of £12 million on a turnover of £340 million.
Mr O'Sullivan described the NBRU claim as "totally unrealistic" in a low inflation economy. It had no regard for the ability of the company to pay the claim and was untenable.
"Dublin traffic managers and Dublin Bus are now trying to get public support for innovative methods to reduce gridlock. It is particularly damaging for the NBRU to strike against Dublin Bus at this time."
He said the claim ignored national agreements and would hit the elderly and others dependent on public transport the most.
However, the NBRU general secretary, Mr Peter Bunting, said the union had no intention of withdrawing the claim. It would be meeting on Wednesday to plan industrial action.
This is expected to take the form of one-day strikes, escalating to all-out stoppages over a period of five weeks, and is likely to begin before the end of next month.
"I would ask could Mr O'Sullivan live on £268 a week?" said Mr Bunting. "If he could, could he please advise my members how to do so.
"The situation we are in today is a knock-on effect of years and years of governments failing to invest in CIE. Even when we contributed to productivity through things like OPOs (One-Person Operated buses) and through cost-reducing claims, all the savings went back to the central exchequer.
"Cities in the US, the bastion of capitalism, provide subventions of 84 per cent to public transport, while Dublin Bus has to generate 83 per cent of its own revenue."
He said his union aimed to secure basic pay rates of £330.