Arthur Morgan (Louth, Sinn Fein)
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Question 268: To ask the Minister for Health and Children the amount that would be saved if she ended co-location. [36882/09]

Mary Harney (Dublin Mid West, Independent)
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The Government is committed to proceeding with the current hospital co-location programme. It is the responsibility of the successful bidders to arrange the financing of the individual co-location projects. However it is an essential requirement that each co-location project demonstrates clear value for money to the taxpayer.

The Finance Act 2009 provides that the schemes of capital allowances for private hospitals and certain other health facilities will be terminated, subject to transitional arrangements for projects already in development. Provided that a co-located private hospital project conforms to the requirements of these transitional arrangements, and otherwise satisfies the general requirements of the scheme of capital allowances, the tax relief will apply. The value of the tax relief in each case will depend on the level of qualifying capital expenditure. I do not accept that, relative to its value, a high proportion of tax would be forgone by the Exchequer in respect of co-location projects as additional revenues would accrue to the Exchequer from the extra activity generated by the construction of the hospitals, the employment arising and the related services provided on which taxes will be paid.

As regards the costs incurred by the HSE on its legal and other expenses in respect of the co-location initiative, there is a requirement on each of the preferred bidders to pay a non-refundable deposit to the HSE on the signing of the project agreement. The intention of this requirement is to allow the HSE to recoup the expenses that it has incurred in this context.