Paul Connaughton Snr (Galway East, Fine Gael)
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Question 101: To ask the Minister for Health and Children the reason tender documents have not been issued to the National Children's Hospital in Tallaght; and if she will make a statement on the matter. [17686/07]

Mary Harney (Dublin Mid West, Progressive Democrats)
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The Board of Tallaght Hospital agreed, on 22 June, to continue its participation in the co-location initiative. I understand that invitation to tender documents in relation to Tallaght will issue in the near future.

Denis Naughten (Roscommon-South Leitrim, Fine Gael)
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Question 102: To ask the Minister for Health and Children if the State will own private hospitals to be built on the land of public hospitals; and if she will make a statement on the matter. [17696/07]

Mary Harney (Dublin Mid West, Progressive Democrats)
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The private hospitals to be developed under the co-location initiative will not be owned by the State. The new co-located hospitals will be separate legal entities and will assume all legal and commercial risks relating to their operations.

Liz McManus (Wicklow, Labour)
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Question 103: To ask the Minister for Health and Children the cost of the co-location project; and if she will make a statement on the matter. [17868/07]

Jan O'Sullivan (Limerick East, Labour)
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Question 104: To ask the Minister for Health and Children the cost of the co-location project; and if she will make a statement on the matter. [17588/07]

Bernard Durkan (Kildare North, Fine Gael)
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Question 131: To ask the Minister for Health and Children the benefit to the taxpayer expected to arise in the context of co-location proposals; and if she will make a statement on the matter. [18082/07]

Dinny McGinley (Donegal South West, Fine Gael)
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Question 136: To ask the Minister for Health and Children the reason she did not conduct a cost benefit analysis on the hospital co-location project; and if she will make a statement on the matter. [17694/07]

Mary Harney (Dublin Mid West, Progressive Democrats)
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I propose to take Questions Nos. 103, 104, 131, 135 and 136 together.

The aim of the co-location initiative is to make available an additional 1,000 beds for public patients. This will be achieved by transferring to new private hospitals the private work which is currently being undertaken in the public hospitals. There will be no direct capital cost to the State arising from this initiative. Furthermore, the revenue cost to the State will be minimum. This is because the beds are already staffed and the back-up services and facilities required to support them are in place. The only staffing cost envisaged is the appointment of additional Consultants, something that the Government is committed to in any event, at an estimated cost of €25 million.

There will be a loss of private health insurance income to the hospitals from private health insurers, estimated at €80 million in respect of the six sites where the co-location initiative is most advanced. However, it is considered that this is a small price to pay in order to free up 1,000 beds for public patients where the running cost of over €300 million is already being met by the State. The loss of income will be mitigated, in part, through income from the lease of the land and a potential share of profits from the co-located facility.

It is anticipated that the private developers will avail of the scheme of capital allowances under the Finance Acts. The level of tax relief depends on the financing arrangements for each hospital. It should also be noted that not all costs are eligible for tax relief under the scheme. The Government's consideration of the initiative assumed a capital cost of €1 million per bed. As I said in the debate on Tuesday, for each €1 million in allowed capital expenditure, the tax cost is up to €455,000 at prevailing tax and PRSI rates, spread over 7 years, and not taking account of tax buoyancy effects. This is still less than the capital cost to the State of building and commissioning an additional 1,000 new beds for public patients.

The policy directive which was issued to the Health Service Executive (HSE) in July 2005 requires it to undertake a rigorous value for money assessment of co-location proposals which takes account of the value of the public site and the cost of the tax foregone. The HSE must satisfy itself that proposals represent better value for money than building, commissioning and operating beds in the traditional way. For this purpose, a public sector benchmark equivalent was developed for each site, which includes the cost of tax allowances and the loss of private health insurance income.

The National Development Finance Agency has confirmed that the tenders received by the Health Service Executive provide value for money relative to the public sector benchmark equivalent at the current stage of the procurement process and that the project is in a position to move to the financial close stage.

Liz McManus (Wicklow, Labour)
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Question 105: To ask the Minister for Health and Children her views on the statutory basis for dealing with the co-location of private hospitals on public hospital grounds by way of ministerial direction; if she will provide an update and timeframe on successful tenders; and if she will make a statement on the matter. [17583/07]

Mary Harney (Dublin Mid West, Progressive Democrats)
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The co-location initiative was the subject of a policy direction issued on 14 July 2005 to the Health Service Executive under Section 10 of the Health Act 2004. I have been advised and I am satisfied that the direction complies with the relevant provision of the Act. The current position in relation to the co-location initiative is that the Health Service Executive (HSE) issued Invitations to Tender for St James, Beaumont, Cork, Limerick, Waterford and Sligo issued on 19 April 2007.

The bids for the six sites were returned on 17 May 2007. It is expected that the HSE will appoint the successful bidders following HSE Board approval at the beginning of July. The Invitation to Tender for Connolly Hospital, Blanchardstown issued on 11 June 2007. The Board of Tallaght Hospital agreed, on 22 June, to continue its participation in the initiative.