IRISH Transport Minister Seamus Brennan is expected to place proposals for breaking up state transport holding company CIE before the Irish Cabinet in the next few weeks. CIE's three existing business units - Iarnród Éireann (Irish Rail), Bus Éireann (the national bus operator) and Bus Atha Cliath (Dublin Bus) - would become separate commercial semi-public companies.

If the proposals are implemented, IE will have an independent board of directors reporting directly to the minister. Brennan says that he is not planning to privatise IE, but there is an expectation that parts of its loss-making freight business will be handed to private sector operators. The annual public transport grant, mostly for rail, will continue.

Several problems beset the proposals. There is strong opposition from the two trade unions, who claim that the plans will cost up to €500m. CIE's accumulated deficit, according to the Department of Transport, is over €230m and this will have to be 'retired' in a way yet to be determined before the new companies are set up; most of this debt accrues to IE. A total of 4700 workers who were taken on before 1987 have letters of comfort, and these will have to be bought out. Shared services within the CIE group, such as IT, will also have to be apportioned.