Kilkenny Co Council is now seeking to discover why Kildare-based Regan Civil Engineering has moved all heavy machinery off site.
After 13 months, only an eighth of the road has been completed. At the present rate of progress it will be 2014 before it is finished.
Under the terms of the contract the work is to be completed by next May.
In a statement, the council said that Regan's reduced considerably its presence on site ten days ago.
Surprise
"The council is surprised with this development. From the council's point of view this action is not justified as the council has fulfiled its contractual obligations on this matter," the statement added.
The local authority is trying to find out the reason for the action through the project engineers.
"As soon as the council can establish the contractor's reasons the matter will be examined to determine the most appropriate course of action to progress works on this project," the carefully scripted communication said.
"As stated previously, a legally binding contract exists between the contractor and the council cannot make any comments which may prejudice its interests in the future on this matter.
"Both parties must utilise the provisions of the contract to resolve any issues which may arise," it concluded.
Cllr Pat Fitzpatrick (FF) has reacted angrily to the latest hold-up and is blaming Regan Civil Engineering for it.
"The city cannot afford any more delays. Motorists are crying out for this extension. All you have to do is look at the tail-backs every evening on the Dublin Road," he added.
He wants the National Roads Authority (NRA) and Transport Minister Martin Cullen to intervene immediately.
"This cannot be allowed to continue for all our sakes," he said.
"This is reaching scandalous proportions and we are looking at an even worse situation than in Eyre Square, Galway," Cllr Fitzpatrick said.
"This would not be tolerated in the private sector and all I can do is applaud Kilkenny Co Council for its patience but enough is enough," he said.
The Kilkenny People sought to contact Regan Civil Engineering yesterday but was told that the managing director was unavailable for comment.