Pádraig Mac Lochlainn (Donegal North East, Sinn Fein)
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Late last year the McNamara Construction building empire collapsed as a result of huge debts. The National Asset Management Agency, NAMA, instigated the collapse by putting McNamara Construction into receivership. The ripples from that event have spread far and wide.

In Donegal North-East, Letterkenny hospital and the people of Donegal have long and eagerly awaited the provision of an extension for a new accident and emergency ward with three modern floors above it. Indeed, recently I had the opportunity to tour the premises with the assistant manager, Mr. Paddy Rooney, and to see the huge potential of that building. The decision on McNamara Construction means that the project has stalled. It should have been completed by spring this year but we now understand from the management of Letterkenny General Hospital that it will not be completed until spring 2012. Furthermore, many of the subcontractors have been left in a desperate financial situation. These are small businesses which, although they were subcontractors, presumed they were in safe hands financially because they were carrying out a public contract. They have been left in a mess.

Before the general election, the candidates or Deputies of at least one of the Government parties assured the electorate that they would deal with this issue, but the Government has been in office for almost 100 days and there is still no resolution. It is time for the Minister of State, Deputy Shortall, and the Minister, Deputy James Reilly, to intervene urgently. There have been knock-on effects. There is a spill-over of patients on trolleys into the coffee dock of the hospital, clinics have been cancelled and there is talk of ward closures. There were a number of quotes reported in the media today from the front-line staff. Nurses said: "We don't have the staff or the facilities to cope; simple as that."; "The situation is intolerable and cannot continue. Morale is very, very low."; "We are at breaking point. We do our best with what we have but there is only so much we can do."; and "Many of us are at breaking point.". That is the response of the nurses, the people whom we trust to work on the front line. They are being failed by the Government in this matter. It must be tackled.

I raised this issue with the chairman of NAMA, Mr. Frank Daly, at the British-Irish Parliamentary Assembly recently. He is a decent and honourable man and he spoke about the difficulty and pain of sending a company, in this case a building empire, into receivership and how there would have to be pain. In this case the people and subcontractors of Donegal North-East are feeling the pain. I urge the Government to do the decent thing. It can hide behind legalities and talk about this and that, but the fact remains that the subcontractors, working on a public contract, have not been paid. They are owed tens of thousands of euro each. They are on the verge of collapse. More important than that shameful episode is the fact that there will be a one year delay, at least, in delivering this critical public infrastructure. It is currently lying empty and not delivering the services that are required.

I wish to express my serious concern about the demands of the HSE for further cuts at Letterkenny General Hospital. It has gone to the well many times with its demands for cutbacks and the well is now thoroughly dry. There have been cuts of €3 million in Letterkenny General Hospital in the last year. I urge the Minister of State and her colleagues to avoid impacting on front-line services and to guarantee to me and other representatives of the people of Donegal that they will provide the necessary resources so front-line staff will no longer be obliged to offer the quotes we have read in recent days.

Róisín Shortall (Dublin North West, Labour)
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I am taking this Adjournment matter on behalf of the Minister for Health. I thank the Deputy for raising the issue as it provides an opportunity to update the House on the matter and to outline the background to the current situation and the action taken by the Health Service Executive.

The Health Service Executive has operational responsibility for the delivery of health and social services, including the construction of health care facilities such as the new accommodation at Letterkenny General Hospital. The Minister for Health is not a party to the construction contracts and has no legal standing in the matter. The delay to the construction is a result of the legal complexities of the receivership process. The HSE is doing its best to expedite matters. This is a difficult situation which has arisen through no fault of the HSE.

The project at Letterkenny General Hospital will deliver a new accident and emergency department and a new medical assessment unit with an additional 29 beds. A total of 72 replacement beds will be provided in the medical ward block over the accident and emergency department and the medical assessment unit. Following the appointment of a receiver, the Health Service Executive took control of the construction works and terminated the contractor's obligation to complete the works under clause 12 of the contract. Notwithstanding this, the contract terms remain in force and the HSE is legally bound by these terms. The HSE must at all times operate within the terms of the contract. There is no basis on which it can be asked to do otherwise.

As is best practice, an insurance bond is an important condition contained in this construction contract. The purpose of an insurance bond is to ensure a construction project can be delivered to the satisfaction of the contracting authority in the event that the contractor is not in a position to complete the project. This is a complex legal procedure and all parties are bound by the conditions of the bond.

The executive and its legal advisers are working with the insurer, sometimes called the bondsman, to ensure the completion of the project. Subject to contract and legal constraints, the HSE will, where possible, take into account the interests of subcontractors but, under the legal circumstances now prevailing, cannot give guarantees in this regard. In accordance with the terms of the bond, the insurer is entitled to nominate a contractor who will complete the project to the satisfaction of the HSE.

Discussions with the insurer are well advanced and the most recent meeting of parties took place late last week. The HSE now awaits the formal proposal from the insurer as to arrangements for completion of the construction. When contracts have been signed and construction commences on site, the best estimate of the HSE at this stage is that the remaining construction work could be completed in approximately 12 weeks. Following this, the building must be equipped and commissioned, which the HSE estimates could take a minimum of six to eight weeks.

I wish to assure the House regarding the management of the accident and emergency services at Letterkenny. The management of Letterkenny General Hospital states that the admission of patients presenting as emergencies is undertaken as promptly as possible and any delays in the emergency unit for admission to a bed are minimised. This focus on managing the emergency workload is reflected in the excellent rating on HealthStat that Letterkenny General Hospital continues to receive when compared with peer hospitals. I thank the Deputy for raising this matter and assure him everything possible is being done by the HSE to ensure the project is completed as quickly as possible.