Adjournment Matters

National Children's Hospital Location

Senator Eamonn Coghlan

I want to address something which I have raised here in the Seanad on a number of occasions. Before I put the question to the Minister of State, Deputy Kathleen Lynch, I want to put on record that I have been very much involved with the Children's Medical and Research Foundation in Crumlin for 29 years, being on the board in the United States as a volunteer and also as an employee, as director of fund-raising development. Over the years, between our golf, marathons, cycles, direct marketing campaigns, corporate and philanthropic work, we have raised many millions of euro to build the new accident and emergency unit, the burns unit, the €14 million new medical tower, the new cardiac ward that is presently underway and almost complete, and the new cancer unit. Only last week, I was in New York city with our New York board establishing a new fund-raising campaign for next year where we hope to raise in excess of €1 million for the hospital. However, this is all about the new children's hospital to which I refer.

The national paediatric hospital website states:

The new children's hospital is the largest, most complex and significant capital investment project ever undertaken in healthcare in Ireland. ...

It will be tri-located on one campus with St James's Hospital and a planned maternity hospital. This tri-location model of service delivery is being undertaken to ensure the best outcomes for our children and young people, for mothers and for infants.

[It] will be a world-class facility.

On tri-location, it states:

Tri-location of paediatric, adult and maternity services has benefits for children and young people, for neonates and for mothers. It allows specialist expertise to be shared across all three hospitals, along with a campus-wide approach to sharing non-clinical services and infrastructure. And it provides the scale and scope for shared learning in clinical practice, research, innovation and education.

On 24 September last, the Minister, Deputy Varadkar, stated:

Today marks another major milestone for the new children's hospital. It's full steam ahead ... Ireland's children deserve a world-class hospital. We've been promising it and talking about it for far too long. Let's get building.

The concern and issue I have, a concern which is shared by many paediatricians from all over the country, is that it is all very well to be co-located with an adult hospital for the reasons of the specialties that are in St. James's Hospital, but their emphasis is on maternity hospitals. My questions in the past have been: is the new paediatric hospital planning to seek planning permission for the maternity hospital at the same time it seeks planning permission for the new paediatric hospital in St. James's Hospital, and if not, why? It would be unfortunate if it took another 20 years, similar to the period from 1936, when Crumlin was designed, to 1956 before it was built, and that of Tallaght hospital, which was almost 18 years from design to planning. I only hope that this tri-location will be covered at exactly the same time and planning permission is being sought for both the paediatric and maternity hospitals.

Minister of State at the Department of Health (Deputy Kathleen Lynch)

As Senator Eamonn Coghlan has probably gathered, I am taking this matter on behalf of the Minister for Health, Deputy Varadkar. I am responsible for many things but, fortunately, acute hospitals is not one of them.

I thank the Senator for raising this important issue in which we all have an interest. As decided by the Government in November 2012, the new children's hospital will be co-located with St James's hospital in Dublin 8. The National Paediatric Hospital Development Board has responsibility for planning, design, building and equipping the new hospital. A project brief has been approved and a design team is in place. The aim is to make a planning application in June 2015.

The Government's intention is that a maternity hospital will be developed on the campus in the future, achieving tri-location of adult, paediatric and maternity services. This is consistent with the recommendations of the 2008 KPMG report, Independent Review of Maternity and Gynaecology Services in the Greater Dublin Area. That report proposed that the National Maternity Hospital be relocated to St. Vincent's, the Coombe to Tallaght and the Rotunda to the Mater, achieving co-location of maternity and adult services in all cases, and tri-location of adult, paediatric and maternity services at the Mater. With the decision to move the children's hospital to the St James's campus, these previous plans must be reviewed in respect of the Coombe and the Rotunda - the relocation of the National Maternity Hospital is already underway. That review is now being commenced and will be completed in early 2015. This is a first step in progressing the future tri-located maternity hospital.

Given the ultimate aim of tri-location, the Minister wished to examine the feasibility of seeking planning permission for both the maternity and the children's hospital at the same time. He was very conscious, however, of the need to avoid any delay in the children's hospital. Accordingly, he asked the National Paediatric Hospital Development Board for its view on whether an outline planning permission application for a maternity hospital could be prepared by June 2015, in line with the children's hospital schedule. The development board's planning experts have advised that for a project of this scale, any planning permission application would require significant preparatory work. This would include: development of a design brief, setting out capacity and accommodation; procurement of a new design team; and design development. In the board's view, this could not be done by June 2015 and would require at least an additional six to nine months. The Minister has no intention of introducing a delay to the children's hospital project, and accordingly does not intend to request the board to seek planning permission for a maternity hospital at this stage.

The development board has advised that in submitting its planning application for the children's hospital, it intends as a matter of good planning practice to provide full information on all known future developments for the St James's campus, including the maternity hospital. This will enable An Bord Pleanála to consider the children's hospital planning application in the context of future plans for the campus. The Minister is fully committed to tri-location of adult, paediatric and maternity hospitals on the St James's campus.

The first priority is ensuring that the new children's hospital proceeds to schedule and is delivered on time for the children of Ireland. In parallel, the review of maternity hospital locations for the greater Dublin area will be completed, as a first step in progressing the future maternity hospital.

I think that answers some of the Senator's questions.

Senator Eamonn Coghlan

Yes. It will not receive planning permission at the same time, and it may be a long time before they will even consider a maternity hospital there.

Deputy Kathleen Lynch

That is not what we are saying. We are saying that if we were to try to proceed with the planning application for the maternity hospital at the same time as the children's hospital, we would delay the children's hospital. From my knowledge of planning, what is important is that all future developments on that site will be notified to An Bord Pleanála in order that it can take into consideration all the preparatory work that is being done. In my experience of planning, that is always a help. It means it will not be completely new to An Bord Pleanála and it will not be a surprise. It will, in fact, ensure that when the application for the maternity hospital at that location occurs, An Bord Pleanála will probably already have some of the preparatory work done.

Hospital Appointments Administration

Senator Colm Burke

I thank the Minister of State for dealing with this matter. The matter I wish to raise relates to work being referred to Cork University Hospital. I will read from something that was sent to me:

Two of the large Dublin hospitals, namely St James's & St Vincent's hospitals, are unilaterally imposing very narrow catchment areas and returning letters to GPs with 'Out of Catchment' or 'Deflect' stamped on them. This means that the GP is then forced to re-refer the patient to a hospital that does not operate catchment areas although that hospital may be much further from the patient's home. A recent example of this is a patient from Enniscorthy, Co Wexford referred to St Vincent's, the letter is rejected and returned to the GP who then has no choice but to refer to Cork University Hospital where there are much longer waiting lists and is without a public transport link to Wexford.

It is in that context that I have tabled this matter on the Adjournment about the imposition of catchment areas. People from the Wexford, Kilkenny and Waterford areas are all coming into Cork in some categories. Who has given the authority for the two big hospitals in Dublin to impose narrow catchment areas from which they will accept patients? That issue must be clarified. In particular, some services have been withdrawn from Waterford and that is now putting huge pressure on the system in Cork.

Deputy Kathleen Lynch

On behalf of the Minister for Health, I thank Senator Burke for raising this important issue and for the opportunity to update the House on the issue of hospital referrals and catchment areas. It is important to note that there is no statutory basis for hospitals imposing catchment areas. However, they have been part of custom and practice within the health service in general for many years. The Minister has been advised by the HSE that it has not altered or changed its national policy on catchment areas. In particular where hospitals traditionally accepted a referral volume to its hospitals from a geographical area, it is expected to continue this acceptance within certain volume referral limits. Furthermore, hospitals advise GPs from time to time on the most efficient referral routes for particular treatments if their capacity in a region increases due to the recruitment of a new consultant or changes due to the reorganisation of clinics or services across a network of hospitals.

On the specific issue of dermatological services for patients from the Wexford area, University Hospital Waterford provides the catchment area referral services for dermatological patients within the south east, which includes Wexford General Hospital. The Minister has been advised by the HSE that there have been some staffing challenges in the dermatology department at University Hospital Waterford and, as a result, the hospital is temporarily unable to accept routine dermatology referrals. Efforts are continuing to recruit replacements for the vacant consultant dermatologist posts at Waterford. An interim arrangement is in place with South Infirmary Victoria Hospital in Cork to maintain provision of services for patients from the south east pending resolution of the staffing issues at Waterford. In addition to this arrangement, University Hospital Waterford is ensuring an ongoing and close linkage with the dermatology department at St Vincent's Hospital and, from 13 November, Waterford will also have a weekly attendance from a consultant dermatologist from Cork who will oversee provision of a service to non-urgent cases in the system. The hospital is also endeavouring to make arrangements with other hospitals in the surrounding regions to take some of the dermatology patients. The foregoing arrangements will be subject to review. The HSE is working with all hospitals to target specific improvements in waiting lists and times across all specialties, including dermatology. The HSE acknowledges that some hospitals will not be in a position to provide capacity for a referral from outside its local geographical area. All referrals are prioritised in line with the HSE's outpatient management guidelines to ensure appropriate scheduling of urgent referrals.

Senator Colm Burke

While I fully accept the Minister of State's response and the response from the HSE, the logistics of someone travelling from Wexford to Cork are not practical. The natural area for Wexford should be towards Dublin. The reason I am raising this issue is not so much that I am concerned about patients from Wexford, although I am concerned about them, but rather about the overloading of the system in Cork, where there is already huge pressure on the hospital, including on urgent issues like skin cancer, with which they must deal. They now find they are coming under increasing pressure and just cannot deal with even the urgent matters because of the volume that is coming in. There is a problem with Waterford, and I will talk to the Minister of State later about why the problem arose in Waterford. It is very important the vacancies there are filled at the earliest possible date, but the hospitals in Dublin should be asked to share the problem rather than passing the buck, as is happening at the moment.

Deputy Kathleen Lynch

I will ensure Senator Burke's remarks are passed on to the Minister for Health and we can speak at a later stage about the need to ensure the posts that are vacant are filled. I have to say that it is not just in this area that there is a difficulty in recruitment. Senators Crown and Burke have a particular interest in this. We have a serious issue with both replacing and retaining medical professionals.

NAMA Property Sales

Senator Lorraine Higgins

I welcome the Minister of State to the House and thank her for taking this matter on the Adjournment. It was reported in the national media in recent weeks that a property sold at Sir John Rogerson's Quay, Dublin for €7.5 million in 2012 was flipped, so to speak, just over a year later for €18 million by NAMA, representing a 136% increase in price. This is astounding and not reflective of the commercial property price increases that have been recorded in the past year or two.

I am not from a corporate background but when all the forecasts suggested the Irish property market would improve, when there was a limited amount of this type of property for sale in the Dublin docklands region and with so many international investors looking to invest here, the question arises as to whether the property in question was sold under value in the first instance. If this is the case, why are we allowing corporate raiders to come to this country, asset-strip and sell on property, making a huge profit at the expense of Irish taxpayers?

What is worrying is that I read in the Financial Times recently how a pension fund in the United States alleges that Blackstone, a company with which NAMA does a lot of business, although not in this case, entered into an agreement with another private equity company for the purpose of ensuring they would not compete with one another for the purchase of property, thus keeping the prices of properties down. They had set up a special purpose vehicle for that purpose. This is very much a feature of this corporate world and it is part of proceedings in the United States of America.

At a time when a report compiled for the agency by investment bank UBS reveals that "losses ranging from €1.4bn to €2.6bn would arise if an accelerated liquidation or fire sale" took place, what measures does NAMA have in place for dealing with those types of risk as they arise in order that the Irish taxpayer can be assured of maximum bang for their buck when it comes to selling off property?

Deputy Kathleen Lynch

I thank Senator Higgins for raising this matter and while these issues can be extraordinarily technical, that is no excuse for shying away from further scrutiny of them.

NAMA's policy is that the sale of all loans and properties by debtors and receivers should be openly marketed to ensure the best price available in the market is achieved in all instances. NAMA enjoys a strong reputation in the market for the quality of information it provides as part of its open market loan sale process and for the transparent and professional manner in which such transactions have been completed to date. Its sales processes are built on international best practice and it uses experienced advisers to ensure transactions are executed to the highest market standards and that bidders are treated equally by mapping out a clear and rigorous process to be followed in each sale. NAMA requires sales agents to prepare final reports and recommendations. Included in these reports is a summary of the marketing campaign undertaken; a list of all parties who expressed interest in the loan or real estate or were contacted during the marketing campaign; a recommendation on whether to accept the terms of the purchaser's offer as the best price reasonably obtainable; confirmation that the agent has reviewed the purchaser's confirmation relating to connected party sales; and a statement disclosing any commercial relationship between the agent, debtor, purchaser or purchaser's ultimate beneficial owners in the past five years and how any actual or perceived conflict of interest was managed during the sales process. This process ensures all interested parties are given equal opportunity to bid for and to purchase loans or properties sold by NAMA or by NAMA debtors and receivers.

The Senator may be aware that the NAMA board is obliged under section 10 of the National Asset Management Agency Act to obtain the best achievable return for the State. Ultimately, over its lifetime, NAMA aims to achieve this by generating sufficient cash from its loans and the property securing them to redeem all its debt and potentially to generate a surplus for the Exchequer. This necessarily involves a constant process of business decision-making as to which assets to sell and when to do so. Having made a decision to sell an asset, the best assurance NAMA can get that it is achieving the best available market price is that it ensures that all sales are openly marketed wherever possible in order that all potential purchasers have an equal opportunity to bid for the asset concerned. This is very much the cornerstone of NAMA's sales processes.

To date, NAMA's strategy in each of its main markets has been to release assets for sale in a phased and orderly manner consistent with the level of demand, the availability of credit and the absorption capacity of each market. In 2013, the Irish market stabilised and commercial yields were at levels which began to attract the attention of serious investors. The patient strategy adopted by NAMA in earlier years has contributed to the robust recovery that is now evident in the market, a recovery which in turn has enabled NAMA to increase the flow of assets for sale and to sell loan portfolios and properties at very competitive prices. Against the backdrop of recovery in the Irish property market, earlier this year, NAMA announced that, in line with its obligations under section 10 of the NAMA Act, it considered that the best financial outcome for the State would be achieved through a managed process of accelerating disposals in an orderly way with the target of redeeming 80% of senior debt - a cumulative €24 billion - by the end of 2016. Following on from the section 227 review of NAMA, which was conducted by the Department of Finance, the Minister for Finance fully endorsed NAMA's strategy of seeking to take full advantage of strong market conditions to reduce the contingent liability on taxpayers represented by NAMA's senior, State-guaranteed bonds. The Minister is fully satisfied that both the strategy informing the NAMA sales process and its requirement that sales are openly marketed and implemented in a professional and transparent manner ensure it maximises the return on its acquired assets so as to repay its debt and therefore reduce and ultimately eliminate the contingent liability of taxpayers.

Having said all that, as with every process that is in place, there will always be people who find ways around it.

Senator Lorraine Higgins

I thank the Minister of State for her response and take her views on board. I note her reference to openly marketing properties, but I was referring to the fact that a new company was set up with new directors who had no prior corporate relationship and, therefore, the question of a conflict of interest did not arise. There could not be a conflict of interest because they had no established relationship by virtue of limited liability. That is the issue, as well as the fact that NAMA does not seem to be engaging in any risk management in the context of such scenarios. Everyone in this House would agree that an increase of 136% in the price of a property in less than 18 months bucks every market trend.

Today I received correspondence from a man who wanted to buy a property. In order to be able to make a bid on that property, he had to view it. He was told that he could view it on a particular day during office hours. Unfortunately, he could not get to see it at that time so he could not make a bid on the property. The restrictive viewing time precluded him from even attempting to purchase the property. He was then informed that the property was sold without getting the opportunity to make a bid for it. He looked at a second property and the same thing happened. He then went to look at a third property but was subjected to the same treatment. All three properties were sold before he had an opportunity to make a bid. This man was a bone fide buyer and was trying his best to acquire a property in the north of Dublin. Unfortunately, he did not get that opportunity. I fear that he would have given more money for those properties than what they were actually sold for but he was not given the opportunity by NAMA to bid for them. He has been unfairly treated - there are no two ways about it. These practices need to be stamped out.

We read about NAMA in the newspapers in the context of social housing it will make available and the extra housing that it will build in Dublin. It is wonderful that NAMA has some social responsibility but if it is not looking after the pennies, how will it mind the pounds?

Deputy Kathleen Lynch

It is very difficult for me to comment on that case. Clearly the man in question has a grievance and I will ensure the Department of Finance hears of it. On the other hand, we do not know that everyone else involved in the sales process for those three properties was treated in the same way. That is the difficulty. We must assume they were all treated in the same way.

On the first issue that Senator Higgins raised regarding the shelf company, it is very difficult to weed out or ferret out that kind of activity unless it becomes absolutely crystal clear-----

Senator Lorraine Higgins

It was the subject of court proceedings in America-----

Deputy Kathleen Lynch

Once it does become clear that such is the case, note should be taken of it. I will convey Senator Higgins' concerns to the Department and to the Minister himself.

The Seanad adjourned at 3.20 p.m. until 2.30 p.m. on Tuesday, 11 November 2014.

Seanad Éireann debate - Thursday, 6 Nov 2014