Other public transport initiatives in Dublin are most likely to benefit from the £114 million in EU funding that was originally earmarked for Luas. An upgrading of the Dublin-Maynooth rail link and new rolling stock for the DART have already been identified by the Department of Public Enterprise as suitable alternative beneficiaries.
However, the Department of Finance will take the final decisions on where the "Luas money" will now be spent. "There is no shortage of projects that this money can be put into," a spokeswoman said last night.
The £114 million was to have gone to Luas from the 1994-1999 EU structural funds, and would have covered half its cost as originally envisaged.
However, a stipulation that the funds had to be drawn down by the end of 2001 means that the current project will not be up and running in time to qualify for the aid.
The money is still available to Ireland but any alternative projects will have to be approved by the EU, probably during the next review of current structural fund spending in June.
Department of Public Enterprise officials have been examining alternative projects since late last year.
It was decided that if the funding was lost to Luas, initiatives aimed at tackling Dublin's chronic traffic problem should be considered.
The improvement in the Maynooth link would involve laying an extra line for two-way rail traffic, greatly increasing capacity on the service which operates on a single rail line.
It is understood that this proposal, as well as extra funding for the DART commuter line which runs along the coast, has already been raised by the Minister for Public Enterprise, Ms O'Rourke, with Cabinet colleagues as possible alternatives to Luas for the EU funding.
While Luas is a Department of Public Enterprise project, there is no requirement for the newly-released funding to remain within that department.
The Department of Finance spokesman agreed, however, that road and rail systems were most likely to benefit from the funding now available. But she said no decision on how it would be spent had yet been made.
The secretary general of the Department of Public Enterprise, Mr John Loughrey, told the Dail committee on public accounts recently that the issue of EU funding for Luas was a "red herring", as the State would not lose out in an overall context.
