The bicycle-and-train-travelling Greens finally managed to squeeze more money for traditionally underfunded public transport.
Crucially, it was not at the expense of the ongoing motorway programme, which is also bankrolled next year.
A record €1bn will be spent on public transport in 2008.
But it is unlikely that the bus and rail projects being funded next year will be completed for many years to come, leaving hard-pressed commuters and travellers still stuck in gridlock in 2008 and beyond.
And while work will continue on the motorways and dual-carriageways, there is mounting concern that local authorities will be cutting back on improving the dangerous backroads because their central funding is being reduced.
Expenditure for the Department of Transport in 2008 is €3.837bn, an increase of €410m.
At a time of unprecedented disquiet over our dismal public transport system, there is an extra €262m being ploughed into this area.
The aim is to deliver additional capacity on commuter rail and bus, including further progress on rail transport extensions in Dublin, the Kildare rail line upgrade, the Cork to Midleton commuter line and the Western Rail Corridor between Ennis in Co Clare and Athenry, Co Galway.
The cash will also be used to kickstart re-opening the rail line between Clonsilla and Dunboyne, eventually linking up with Navan.
An additional €74m is being earmarked for the national roads programme, which promises full motorway or dual-carriageway between Dublin and Cork, Galway, Limerick, Waterford and the Border by 2010.
With public clamour for new ways of reducing Ireland's unacceptably high level of road deaths, an extra €45m goes towards improving the non-national roads network.
These are the backroads, mainly in rural areas, where most of the fatal crashes are taking place.
Many of these roads contain treacherous stretches where repeated fatalities are occurring, yet cash-strapped local authorities have not fixed them.
Over €20m is going on road safety programmes and campaigns next year.
This includes a once-off payment of €11m to help cut the long waiting time for driver tests and meet a target set by Transport Minister Noel Dempsey and the Road Safety Authority of just 10 weeks by June 30 next.
Mr Cowen said the Government would be spending €2.7bn on rail and bus services, national and secondary roads, regional airports and ports.
Of this, nearly €1.7bn will be invested in our national roads network, he promised.
"We are building high class roads, which are absolutely integral to economic activity and long-term economic and social prosperity," he added.
The minister promised the M50 would be completed next year with four lanes between the N4 and Ballymount and a transformed and a fully functional Red Cow junction.
The West-Link Bridge should also have four lanes by the end of next year, with barrier-free tolling too.
Elsewhere around the country, 29km of dual carriageway will open between Kilbeggan and Athlone, 37km of dual carriageway will open between Cashel and Mitchelstown, and 19km of dual carriageway will open to bypass Carlow Town.
Irish Rail would also continue to introduce its fleet of 183 railcars into service across the intercity network.
By next summer, the passenger capacity on the Tallaght Luas line should have gone up 40pc.
Treacy Hogan Environment Correspondent