Work began today on extending the Luas from Tallaght to Citywest and Saggart in west Dublin.
The 4.2km Red Line spur will have five new stops at Fettercairn, Cheeverstown, Citywest Campus, Fortunestown and Saggart.
It is intended construction will be completed on "Line A1" by the end of 2010 and passenger services will begin in early 2011.
Some 27 million passengers travelled on the Red and Green lines of the Luas last year.
The Taoiseach said the Government would continue to invest in public infrastructure despite the difficult economic outlook.
“Ireland has one of the biggest capital investment programmes in Europe,” he said at today’s signing of contracts at The Square in Tallaght.
The Taoiseach said the Luas extension project will support new construction jobs and general economic activity in the local area.
A new Red Line extension from Connolly Station to the Docklands is expected to be completed by the end of the year.
Linking the Green Line to Cherrywood in south Dublin remains on schedule for completion by the end of 2010.
Mr Cowen said the Railway Procurement Agency (RPA) has worked closely with local authorities to integrate transport and land use policies for the Tallaght-Saggart project.
“The State can ensure that land is developed at densities that are appropriate and investors are assured of developments which are well served by public transport.
“By adopting this collaborative approach, developments are made more attractive and sustainable in the long term,” he said.
PA