The 12-metre long 'bus tram', which runs on an electric/bio-fuel hybrid engine, is to be introduced to cities across the country in the coming months.
Bus Eireann unveiled the new BRT (Bus Rapid Transit) system in Waterford where the company hopes to pilot the new streetcar.
Bus Eireann plans to overhaul the service in the Waterford area over the next two years.
Dr John Lynch, chairman of CIE, said that the new streetcars would run "at one-tenth of the cost of traditional tram and present light rail".
He added: "We would envisage trying out at least one of these bus trams on the streets of Cork, Galway, Limerick and Waterford in the coming year."
He said the bus trams, which are manufactured by Wrights in Ballymena, Co Antrim, cost just €200,000 each to put on the road.
"The BRT system can be implemented at a fraction of the infrastructure cost of the LUAS or other traditional tram alternatives," said Mr Lynch.
The CIE chairman also spoke of the company's plans to replace the entire local fleet of buses serving Waterford city and the introduction of 35 new buses by 2009.
Environment Minister Martin Cullen, a Waterford TD, gave assurances to the company that their plans would be factored in under the Transport 21 initiative.
"The attractiveness of Bus Rapid Transit lies in its potential to deliver a very high frequency service at a fraction of the cost of designing, building and maintaining a full-scale tram system," said Mr Cullen.
"These streetcars can operate on ordinary road space and are capable of running on alternative and more environmentally friendly fuels," he said
Mr Cullen stated that the streetcars fall in line with work currently being carried out as part of a new 'Government taskforce strategy on climate change' to be launched before Easter.
"A sustainable transport action plan will be prepared as part of this overall strategy," he said. "It will address a range of issues and forecast how the transport sector will significantly contribute to reductions in carbon emissions by 2020.
"The public transport sector will be expected to show strong leadership in this regard and I am prepared to support proposals to move the fleet to a more sustainable basis as speedily as it is feasible," he said.
CIE are currently looking at government proposals to move all Bus Eireann and Dublin Bus vehicles to a 5pc bio-diesel blend and to plan to achieve a 30pc bio-diesel blend in all new buses.
Yesterday's launch also heard from John Clancy, chief architect with CIE, who unveiled plans for a €10m redevelopment of Waterford's main railway station.
The plans, which have been lodged with the local authority, allow for a 340-space multi-storey carpark on the existing Plunkett station site and a new exit on to the N9 road.
© Irish Independent