Iarnród Éireann yesterday rejected a claim that it had acted in a "high-handed" manner in closing the rail link to a port close to Waterford city.
Mr Peter Foley, the chief executive of the Port of Waterford company, said Iarnród Éireann was currently "dismantling" the rail connection to the port.
Mr Foley accused the company of engaging in pre-emptive action, in advance of the completion of a strategic study on the future of rail.
"As in excess of 99 per cent of imports and exports come through the ports, this decision is ensuring that road is becoming the only option for internal transport," he said.
"This is flying in the face of best international practice where rail is increasingly seen as an attractive solution.
"The consequences for congestion in towns and cities and particularly the N9 (Dublin to Waterford) road are incalculable."
A spokesman for Iarnród Éireann, Mr Barry Kenny, said it was not correct that the rail line in question was currently being "dismantled".
However, the company had ceased its rail freight service in some areas and was instead offering customers a road service as an alternative.
This was because, under the terms of an agreement with the Spencer Dock development company in 1998, Iarnród Éireann would be vacating an area in the North Wall in Dublin, currently used for its container business, on January 3rd.
Arising from this, €1 million had been invested in relocating to another area in the North Wall, where it could continue handling 85 per cent of current container volumes.
This meant most rail container operations, including those linking Dublin with Limerick, Cork, Longford, Sligo and Ballina would be kept open.
The alternative road service was being offered to customers on the Galway, Waterford and Dundalk/Belfast routes only.
In the case of Waterford, the business involved an average of six containers a day.
Mr Kenny said the investment required to maintain the rail service at its previous level would have been €10 million.
The situation would be re-examined on publication of the strategic rail review, when overall decisions on the future of rail freight would be made.
Mr Foley claimed the closure of the Waterford port link would have a negative impact on the country's road network and the port.
