Enda Kenny (Mayo, Fine Gael)
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Question 158: To ask the Tánaiste and Minister for Finance the cost to the Exchequer of co-location hospitals in terms of tax relief to date; the estimated cost over the five year programme; and if he will make a statement on the matter. [29848/07]

Brian Cowen (Laois-Offaly, Fianna Fail)
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The scheme of capital allowances for the construction or refurbishment of buildings used as private hospitals was introduced in the Finance Act 2001 and came into effect in May 2002. Provided that capital expenditure on the proposed co-located private hospitals, which are designed to free-up capacity in public hospitals, conforms with the existing legislation governing that scheme, normal tax relief will apply.

The cost of such tax relief will ultimately depend on the level of qualifying capital expenditure and no such expenditure on the proposed co-located hospitals has yet been incurred. For each €100 million of qualifying capital expenditure on these hospitals, the cost of tax relief to investors (assuming a marginal tax rate of 41% for those investors) would amount in gross terms to €41 million spread over 7 years. Of course, with the additional activity generated by the construction of the hospitals, the employment generated and the related services provided on which taxes will be paid, additional revenues would accrue to the Exchequer.

The Board of the Health Service Executive has approved preferred bidders for six co-located hospital sites. The hospitals and the preferred bidders have been working towards finalising the Project Agreements for these sites. It is expected that the Project Agreements for the sites will be concluded in the near future. Two further hospitals are at an earlier stage of the procurement process.