CIE has told its unions that its borrowings will exceed £250 million by 2000 if it does not introduce drastic cuts. Under existing legislation £250 million is the maximum amount the State transport group is permitted to borrow. The CIE board has already committed itself not to exceed a debt ceiling of £200 million.
The figures were given to the CIE unions at a meeting with the management of the rail subsidiary, Iarnrod Eireann, yesterday. Iarnrod Eireann is expected to absorb £30 million of the £44 million a year reduction planned in the group's operating costs.
As expected, Iarnrod Eireann provided unions with details of £21 million worth of cuts it hopes to achieve through payroll savings. These involve 500 voluntary redundancies and the redeployment of another 286 employees, which will save £15.6 million.
The elimination of £6 million worth of overtime and shift payments is also proposed. This would mean cuts of £100 to £200 a week in the pay of many rail workers.
Last night union leaders unanimously condemned the proposals. The secretary of SIPTU's rail branch, Mr Tony Tobin, said that the proposals "did not have a dog in hell's chance" of being accepted. He warned that the union had already balloted members for industrial action.
Mr Tobin added: "Some of our members will lose their homes and will be unable to educate their children if they have to live on those sort of rates." He called on the Labour Party and Democratic Left to ensure that workers in a semi state company did not have their living standards "devastated" while the Government presided over an "economic boom".
He pointed out that the CIE unions had put political pressure on the Government to prevent rail jobs being scrapped on the Claremorris line late last year. "And we'll do it again, if we have to. I'm delighted it's an election year.
The National Bus and Rail Union representative, Mr Liam Tobin, said it was unacceptable for Iarnrod Eireann to talk about improving productivity while taking money out of his members' pockets.
The secretary of the CIE group of unions, Mr Hugh Geraghty, said that there was deep distrust of the management because of previous breaches of procedure. "There is certainly no mood to agree to changes among our members. The company has to realise it can't expect staff to deliver a better service by reducing their pay and disimproving their working conditions.
Iarnrod Eireann presented the unions with a document entitled "Building the Future" at yesterday's meeting. This stated that the cost of servicing the CIE group's current debt of £176.5 million was more than £16 million a year. "If revenue and expenditure increased in line with inflation, borrowings would rise to in excess of £250 million by the year 2000, assuming that the planned capital investment programme was implemented. This would represent an increase of 46 per cent on the 1995 borrowing level."
Since 1987, according to the document, total income, including State subventions, had risen by 29 per cent to £219 million a year, but expenditure had risen by 35 per cent to £235 million a year.
All three union leaders were pessimistic about concluding an agreement. Mr Liam Tobin said that the only way to avoid a strike would be to bring in work practices which achieved savings with no loss of earnings or disimprovement in conditions.
The unions are due to meet Dublin Bus management today and Bus Eireann early next week to hear their cost cutting proposals. Negotiations are supposed to conclude by March 31st.