Northern Ireland’s biggest ever roads project is facing the axe after the Irish government pulled the plug on £400m funding it had committed to the scheme.
Work on the 54-mile dual carriageway — which would create a key cross-border business route linking Dublin to the north-west — was due to begin next year.
But it’s effectively been shelved after the Irish government announced it could not fulfil its obligation to jointly finance the road.
While the Republic's transport minister insisted his government remained “politically committed to the A5”, senior political sources at Stormont said they believed the A5 project was “definitely gone”.
Finance Minister Sammy Wilson also confirmed the Executive's contribution to the A5 would now be spent elsewhere.
Meanwhile First Minister Peter Robinson described the news as “deeply disappointing but not entirely unexpected” given the “severe financial restraints” facing the Republic.
The A5 project had been years in the planning and was seen as key to opening up the north-west to greater economic investment.
It would have run from the border near Aughnacloy through Omagh and Strabane to Derry, with its £850m cost jointly financed by Stormont and the Irish government.
Speaking last night, Mr Wilson said the Republic’s decision to pull out meant the project was effectively over.
“The Irish government have said that between now and 2016 they will not be able to commit any money at all,” he told the Belfast Telegraph.
“As far as this term of the Assembly is concerned there is no money, the whole project is pulled and it won’t go ahead.”
While Stormont had pledged over £400m towards the scheme, Mr Wilson insisted it would now be redistributed.
“Many people will think this £800m spend is lost to Northern Ireland — it’s not,” he added.
“Our £400m will be reallocated, and we are looking at other projects such as schools, houses or hospitals which might actually have a greater impact on the local economy than road building would have done.”
Mr Robinson said the Executive needed to examine how best to reallocate the financial package set aside for the project.
“This announcement will come as a considerable blow to the local construction industry, which has already suffered greatly during this downturn,” he added.
“It will therefore be our priority to identify projects that will ensure that construction jobs are supported.”
Regional Development Minister Danny Kennedy said he would bring forward road projects across Northern Ireland to boost the economy.
“I had been aware of the financial position that the Irish Republic has found itself in, and I have sympathy for that position,” he told this newspaper.
“However, there are also opportunities here aside from the |disappointment.”
While doubts had been increasing about the Republic’s ability to meet its contribution, Taoiseach Enda Kenny had stressed his government’s commitment to the project as recently as September.
Earlier this year, Mr Kenny also said the road needed to be developed.
“The previous government had committed to put money in there and we will honour that commitment,” he had said.
Deputy First Minster Martin McGuinness said he was bitterly disappointed at the Dublin government’s U-turn.
“I am bitterly disappointed that Irish Government has gone back on their commitment,” he said.
“This is a key route for the future economic growth of the north-west and I intend to raise the matter with the Irish government at the earliest opportunity.”
The chairman of Strabane District Council, Brian McMahon, said it had set the area back 30 years.
Irish transport minister Leo Varadkar, said his government remained “politically committed to the A5”.
He said he expected work to take place in the future, but £400m was “a commitment difficult to honour given what we're facing”.
A spokesperson for the Irish Department of Transport said: “We remain politically committed to this project and expect work to commence during the 2012-2016 capital programme.”