The 1bn mixed-use development will include 25 dedicated bus bays and an upgrade of rail services from two platforms to three, but also will feature a new "urban quarter", including community facilities, shops, bars, and more than 500 residential units. CIE said the design template also allows for a future light rail interchange on Eyre Square similar to the Luas stop outside Heuston station in Dublin, although there are no plans for a tram system in Galway.

Although no planning application has yet been lodged, the business community . . . as well as politicians and city residents . . . are wary of the effect such a large installation will have on the already congested roads of the city centre.

"The redevelopment is long overdue, but as it stands, this plan will only benefit the merchant princes of Galway by building flats and shops in the city centre and making it much more difficult to expand the public transport links which companies here really need to grow, " said one local small business owner. Like many of his peers, he requested to speak to the Sunday Tribune anonymously as "there's a lot of bitterness growing already in the city and the last thing we need is more bad news after the water crisis here".

"We've waited a thousand years for government funding for the outer city bypass, and we saw how long the Eyre Square redevelopment took, so maybe this public-private partnership to redevelop Ceannt will happen faster, " said another Galway businesswoman. "Limerick and Cork are racing ahead and we need to catch up."

CIE plans to dedicate around one third of its 60,000 square metre site between Eyre Square and Loch Atalia to a transportation interchange, which is to be funded by long-term lease agreements and a proportion of unit sales with a consortium of retail and residential developers.

"The scenario can be described as a public-private partnership, however the public sector will minimise its exposure to risk in that the private sector will fund the infrastructure up front, take all the construction risk of the urban quarter, and protect for the public sector a substantial income stream tied to the value of the completed development into the future, " said a CIE statement. "The alternatives are for the exchequer to fund the interchange or for us to simply sell surplus land and develop the public transport interchange independently."

The departmemt of transport confirmed that it had allocated no funding under the Transport 21 strategy or National Development Plan and that it is up to the board of CIE to decide if its property is surplus to transport requirements.

CIE said a large proportion of its "significant" city centre property was either disused or dedicated to activities more effectively provided elsewhere. These include bus maintenance, refuelling and washing areas, a bus park, a disused stable yard, car parking facilities "that are ineffective and inefficient", the Friarfield green space, and a freight facility.

Fr Micheal MacGreil of the West on Track lobby group expressed disappointment that CIE had not investigated retaining a night-time freight facility, and argued Ceannt station will need four platforms to accommodate waiting trains when the western rail corridor opens.

"It's short-sighted to not take account of the extra commuter capacity the western rail corridor will bring to Galway, " he said.

David Niland, president of Galway's chamber of commerce, however, said he was enthusiastic about the redevelopment of Ceannt station and a separate project for the nearby port, but was "anxious" to ensure enough space was set aside for future road and rail connections.

"What should happen is a more ambitious plan for the residential and commercial aspects of the CIE site with more density allowed, " he said. Although the city development plan does not allow for high-rise developments, Niland believes it makes economic sense as long as residential units are a "decent size".

"High rise is the future of cities and we should be building up, not out, " he said.

Galway City Council planning department would not comment on a development proposal pre-application, but a council spokeswoman said pre-planning meetings between Ceannt Station developers and city officials were ongoing.

CIE said it would seek planning permission from the local authority and An Bord Pleanala "as appropriate" and expects a new bus and rail interchange to be delivered by 2011.

Independent MEP Marian Harkin believes An Bord Pleanala should not allow fast track planning for the Ceannt site because it will benefit private interests.

"This whole procedure must go through the proper channels. It can't be a deal done between developers and CIE as if the city centre belonged to them alonef the fast track planning legislation was introduced to help expedite essential infrastructure projects which were for the common good, and not to provide opportunity to speculative developers."