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 the amounts claimed by investors; to date 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 or approximately €5.9 million per annum over that 7 year period. Given 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.
I have been informed by the Minister for Health and Children that the Board of the Health Service Executive has approved preferred bidder status for the development of co-located hospitals at the following six sites: Beaumont Hospital, Cork University Hospital, Limerick Regional Hospital, St. James's Hospital, Waterford Regional Hospital, and Sligo General Hospital. Connolly Hospital and Tallaght Hospital, which are also participating in the co-location initiative, are at an earlier stage of the procurement process.