Jan O'Sullivan (Limerick East, Labour)
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Question 192: To ask the Tánaiste and Minister for Finance the financial arrangements the State has entered into with regard to the collocation of private hospitals on publicly owned lands adjacent to public hospitals; if his Department has estimated the amount of tax that will be foregone by the State in relation to the building, equipping and running of these hospitals; and if he will make a statement on the matter. [6381/08]

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.

In relation to the hospital co-location initiative, I have been informed by the Minister for Health and Children that the Board of the HSE has approved the successful bidder status on six sites as follows: Waterford Regional Hospital, Cork University Hospital, Limerick Regional Hospital, Sligo Regional Hospital, Beaumont Hospital, St James's Hospital. Since then, the hospitals and the bidders have been working towards finalising the Project Agreements. It is expected that the Project Agreements for Beaumont, Cork and Limerick hospitals will be signed very soon. It is also anticipated that the signing of the Project Agreements for the other three sites will be concluded shortly thereafter. Connolly Hospital and Tallaght Hospital, which are also participating in the co-location initiative, are at an earlier stage of the procurement process. A tender in relation to Connolly Hospital is under consideration and it is expected that the invitation to tender (ITT) for Tallaght Hospital will issue in the near future.