James Reilly (Dublin North, Fine Gael)
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Question 70: To ask the Minister for Health and Children to outline the funding difficulties with regard to the co-location plan; her views on the fact that more than three years since the announcement of this plan not one bed has been created; and if she will make a statement on the matter. [42894/08]

Mary Harney (Dublin Mid West, Progressive Democrats)
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The aim of the acute hospital co-location initiative is to make available additional public acute hospital beds for public patients by transferring private activity, with some limited exceptions, from public acute hospitals to co-located private hospitals.

The beds in public hospitals that were formerly used for private patients will be used for public patients. In addition, public patients may also be treated in the new private beds, subject to value-for-money agreements being entered into with the HSE or the National Treatment Purchase Fund. Each co-location project is required to demonstrate value for money for the State, taking into account its comprehensive benefits, as well as the cost of tax allowances and private bed revenue currently accruing to public hospitals.

There is a complex process to achieve the results we seek and significant progress is being made. The board of the Health Service Executive has approved preferred bidder status for the development of co-located hospitals at Beaumont, Cork University, Mid-Western Regional Limerick, St. James's, Waterford Regional and Sligo General Hospitals. Project agreements for the Beaumont, Cork and Limerick sites were signed in March 2008.

Planning permission was granted by An Bord Pleanála for the Beaumont project earlier this month. Planning permission for the Cork and Limerick projects was granted by the local authorities concerned and appealed in each case to An Bord Pleanála. The necessary preparatory work for project agreements in respect of St. James's Hospital, Waterford Regional Hospital and Sligo General Hospital is proceeding. A tender in respect of Connolly Memorial Hospital has been received and is under consideration. Work is being undertaken to finalise the invitation to tender for Tallaght Hospital. It was not envisaged that projects would be completed at this stage. I am satisfied that co-location remains the fastest, most efficient means of increasing public bed capacity in acute hospitals.

As regards funding, each successful bidder has to arrange its finance under the terms of the relevant project agreement. It is the case that the funding environment has changed radically in the past six months, for both public and private sectors and as with other major projects the co-location initiative has to deal with this. The successful bidders are working on the details of contractual terms with banks and other arrangers of finance in the very difficult and changed credit environment. The HSE is continuing to work with the successful bidders to ensure that the co-located hospitals can be built and brought into operation as soon as possible, and that the goal of achieving new public acute bed capacity at value for money to the State is achieved.

James Reilly (Dublin North, Fine Gael)
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Unfortunately, although I very much wish to believe what the Minister is saying I cannot. The co-located hospitals issue is still an ongoing quagmire. The plan has not delivered a single extra bed to the country. The Minister has removed 500 beds this year and will remove a further 600 next year. This is all very familiar to me. There are promises of wonderful things to come tomorrow while the Government takes away what is in place today.

Are all companies involved in the co-location process tax compliant and have such companies filed tax returns on time? The Minister mentioned contract negotiations. Are these completed, signed and legally binding? What recourse is there for the taxpayer if these companies proceed with these contracts? Have the banking requirements for funding been resolved? I believe there was a significant issue long before it was known the economy turned.

I mentioned the matter of reducing the number of beds. I asked a question earlier and perhaps the Leas-Cheann Comhairle can rule on the matter. Can the Minister specify which services had a slower than expected roll-out from which the Minister hopes to save €38 million in the supplementary budget?

Mary Harney (Dublin Mid West, Progressive Democrats)
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I realise there is an obsession with co-location. The purpose of co-location is to convert some the beds currently available. Some 700,000 bed days per year are used in public hospitals funded by the taxpayer for private patients at a subsidy of considerably in excess of €100 million. Since I became Minister for Health and Children I have substantially increased the cost of those beds to the insurers. I have more than doubled the cost of category 1 beds and category 2 beds to reduce substantially the subsidy paid by the taxpayer to beds that can only be occupied by insured patients. This is the purpose of the policy. As the Deputy is aware, owing to consultant contracts and so on, it is desirable to keep our consultants on site rather than moving among three or four hospitals to look after private patients. I was in Beaumont Hospital, Dublin last night, which Deputy Reilly has often referred to as his constituency hospital. It has 110 beds for private patients. I believe it would be highly desirable to convert those beds for the use of public patients which the taxpayer is funding and the staff of which are all paid for by the taxpayer.

I do not have details regarding tax affairs of the relevant companies. There are rules relating to State projects which apply and relevant companies must be tax compliant. I am not aware of the tax position of any company involved. If the Deputy has information which he wishes to make available to me, I would be more than happy to receive it. It is not a matter for me. Project agreements and bids must be overseen by the HSE. I am not involved in the selection of tenders or in negotiations with bidders. I am optimistic that we can see progress by way of construction on these sites very quickly. I understand that from the time work begins it will be approximately two and a half years before these beds can be commissioned.

James Reilly (Dublin North, Fine Gael)
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I repeat the questions previously asked. Will the Minister confirm by letter within one week or ten days the position of the tax status of the companies? I believe the staff in the Department can do this. I asked if contract negotiations had been completed and what the legal implications would be for those who have signed contracts which do not materialise. That question was not answered. Have the banking requirements been resolved?

Mary Harney (Dublin Mid West, Progressive Democrats)
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The banking requirements are a matter for the bidders and their banks. I am not involved in negotiating with banks on behalf of bidders. I was accused in the House for many months of devising what was termed a sweetheart deal from which everyone would benefit. Now the Deputy accuses me of a deal so restrictive that no one can raise the finance to build accommodation for these beds. That seems to be the implication.

James Reilly (Dublin North, Fine Gael)
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Not at all. The Minister should not be paranoid.

Mary Harney (Dublin Mid West, Progressive Democrats)
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The tax situation of companies is a matter for the HSE. However, I will seek to establish the facts. If the Deputy has information, I invite him, perhaps on a confidential basis, to make it available to me. The Deputy seems to be operating on foot of some information he may have which I would be very happy to receive.