Paul Gogarty (Dublin Mid West, Green Party)
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Question 111: To ask the Minister for Health and Children the reason the co-location of public and private hospitals represents good value for money; and if she will make a statement on the matter. [41446/06]

John Gormley (Dublin South East, Green Party)
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Question 241: To ask the Minister for Health and Children the reason the co-location of public and private hospitals represents good value for money; and if she will make a statement on the matter. [41669/06]

Mary Harney (Dublin Mid West, Progressive Democrats)
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I propose to take Questions Nos. 111 and 241 together.

The cost of developing private hospitals on public sites must be seen in the context of delivering up to 1,000 acute hospital beds for public patients. It also has to be seen in the context of the significant benefits that the HSE expects to receive in return for the concessions granted to the private operators.

The Health Service Executive has informed my Department that in 2005 the 10 public hospitals selected as sites for co-located private hospitals charged health insurers for a total of €111 million. I was informed by the HSE yesterday that, as a result of the ongoing public procurement exercise, the co-location initiative will not be proceeding on two public hospital sites at this time. These sites in question are Galway University Hospitals and Letterkenny General Hospital. Leaving aside those two hospitals, the figure reduces to €88.6 million.

In addition it is estimated that tax forgone under the capital allowances scheme will be about €420 million over a 7 year cycle. This is less than half the capital cost of providing the same number of beds through direct exchequer capital funding.

A rigorous value for money assessment of each co-location proposal will be carried out by the HSE. This has been a requirement from the start. No project will proceed without the value for money to the State being demonstrated.