EUROTUNNEL'S new French chief believes he can make cost savings of about £30m without immediate staff cuts.

Jean-Louis Raymond, the chief executive who replaced Canterbury-based Richard Shirrefs after a boardroom clearout by angry French shareholders on April 7, has told staff at the Folkestone terminal their jobs are safe for the time being.

The reassurance followed a 90-day analysis of the situation by the debt-laden Channel Tunnel operator that the new board inherited from previous directors.

In it, Eurotunnel, an Anglo-French company that owes £6bn and faces big cash-flow problems, ruled out immediate plans for the so-called Europorte 2 rail freight project at Folkestone. But it would be relaunched "on a more solid basis".

The company announced radical cost-cutting plans and, without giving any details, said there would be a fares shake-up.

Admitting that turnover from shuttle services had declined, he hinted that fares were too low, attacking Eurotunnel for an "incoherent" pricing structure and for being "locked into its rivals' pricing policy" that "triggered a price war".

He accused his predecessors of failing to emphasis "the exceptional quality of its product in its advertising and applied a pricing structure reflecting fluctuations in demand in order to promote greater income from the shuttle service". It had done little to promote its offering and abandoned Le Shuttle brand.

All this had led to low awareness outside the UK and fares that were hard to understand. But he also recognised that Eurotunnel had lost customers to low cost airlines.

He paid tribute to the staff on both sides of the Channel. He said: "The teams are of excellent quality and keen to have new reasons for motivation. Our prime priority is to reorganise the Group and motivate the operational teams that will head the recovery.

"Far from undermining the social cohesion of the Group, we are convinced that this new approach will make our teams even prouder to work for Eurotunnel."

He said the potential for cost-cutting was huge - more than 40m euros a year - but it entailed "far-reaching change in our organisation and our way of working".

There was duplication of tasks, a multiplication of co-ordination and control structures, and "the difficulty of obtaining a global vision and direction.

"The way we operate is based on strict compliance with procedures, rarely questioned, rather than being objective and result-orientated. The latter are insufficiently assessed and rarely given recognition. The simple budgetary approach still dominates over any real cost containment.

Mr Raymond told the company's one million shareholders: "Eurotunnel's recovery is becoming possible; we have identified the conditions that need to be met, but time is short.

"A long-term plan will be finalised at the end of October. It will set out Eurotunnel's new financial and operational strategy, the broad outlines of which will be made known at that time."

However, he acknowledged the challenge was a big one. "We would not be so bold at present to say we have come up with the solution to a problem as complex as the one our Group has faced over the past decade."

He accused the company of losing sight of its main mission "to provide the most efficient services in the market to the greatest number of customers at the best possible price."

Mr Raymond said British directors would be appointed and the recruitment process was "going well".