Bernard Allen (Cork North Central, Fine Gael)
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Question 93: To ask the Minister for Health and Children if the Health Service Executive has published its cost benefit analysis on the multi-million project to provide 1,000 private beds in the grounds of public hospitals. [35505/06]

Mary Harney (Dublin Mid West, Progressive Democrats)
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The co-location initiative is designed to deliver up to 1,000 new public beds at 10 public hospitals for an estimated tax cost of about €420 million, less than half the full capital cost. The tax cost will be offset by VAT and other taxes paid during construction. Lease payments at commercial rates in respect of public land will be paid by the private operators, in contrast with the current situation where there is no return on the public land in question.

Following an open procurement process in December 2004, my Department commissioned Prospectus Management Consultants to provide:

succinct and appropriate strategic and investment appraisal frameworks for the initiative; and

formal criteria and conditions for such proposals that would both encourage private initiative and promote and protect the public interest.

I published the full policy direction and the other documentation when launching this policy in July last year. This included details of the investment appraisal framework suggested by Prospectus Consultants for the HSE to apply.

A rigorous value for money assessment of each co-location proposal will be carried out by the HSE. I have required this of the HSE from the start. No project will proceed without the value to the State being demonstrated. This is how cost-benefit analysis is built into the initiative.

The National Development Finance Agency is assisting my Department to ensure that the financial assessment method being applied by the HSE is entirely robust.