Business leaders in the north-west have described as "catastrophic" a National Roads Authority decision delaying funding for a major road through Sligo town.
Fianna Fáil has conceded that the decision could affect the party's chances of retaining its two seats in the constituency.
As a result of National Roads Authority allocations announced on Thursday, work on Sligo's inner relief road, which was expected to start immediately, will not go ahead this year. Just €1.27 million was allocated which is only enough to cover archaeological work. An allocation of €10 million was needed this year.
The director of Sligo Chamber of Commerce, Mr Marc MacSharry, described the decision as "an absolute disgrace". He said that once again infrastructure projects on the east coast were getting precedence.
"This is catastrophic in terms of stimulating business confidence, attracting foreign investment and in terms of quality of life," he said. The IDA and Enterprise Ireland were playing with "half a deck" because of Sligo's chronic traffic problems which had not been addressed in 20 years.
"Frankly this means that a lot of the IDA's work may be in vain," Mr MacSharry said. Government-commissioned reports had shown the urgent need for infrastructure in the north-west. "If we can't get it in an election year, what hope do we have in June?" he asked.
IBEC has said traffic in Sligo is "steadily approaching gridlock" and was "responsible for countless hours and financial losses each year". The regional director of IBEC in the north west, Mr Padraig O'Grady, said he believed the decision would affect foreign investment. As Sligo was the capital of the north-west, it would affect the whole region.
"This road has been a contentious issue for 20 years and Sligo hasn't had success in attracting major foreign investment. I know there are a lot of decisions on future developments that were dependent on this road going ahead," he said.
The planned inner relief road got the go-ahead from the Minister for the Environment, Mr Dempsey, after a Bord Pleanala hearing and houses close to the town centre have been controversially demolished to make way for it.