A private consortium selected by the Health Service Executive to administer the refund of nursing home charges illegally deducted from elderly people is to be paid up to €15 million to do the job.
The HSE confirmed yesterday that this fee does not include VAT.
Furthermore, it confirmed a report in this newspaper yesterday that the tender to administer the refunds had been awarded to a KPMG consortium, which also comprises McCann FitzGerald Solicitors.
In addition, it confirmed the consortium planned to outsource some of the work involved in the administration of the refunds to India.
However, it said it had no difficulty with this, claiming EU law "facilitates the transfer of data outside of the EU for processing where certain contract clauses are used". It added that it had worked with the Data Protection Commissioner to ensure all necessary measures were in place to protect the confidentiality of information.
The plan has been condemned as "ludicrous and expensive" by Labour's health spokeswoman Liz McManus. She said the decision to appoint a private consortium to do this work at very significant cost should be revisited. "I never believed that there was a need to give this work to outside consultants as the expertise required to administer the scheme is available within the public service," she said.
The HSE said the processing of repayments would begin in mid-July and it claimed "there was no delay in the tender process". However, it first initiated the tender process last summer. The initial tendering process was abandoned and a second started in February.
Although it was originally claimed the first tendering process was abandoned because those tendering were seeking too much money, a reply from the HSE to a parliamentary question from the Fianna Fáil backbencher Jim Glennon now makes it clear this was not the only reason.
The reply states that after shortlisting 12 expressions of interest received, three companies were invited to submit a tender.
"The reason that the procurement process was terminated in 2005 was due to the fact that one of these tenders arrived late for consideration, a second tender was found to be materially non-compliant and the third tender was materially compliant subject to some minor issues. With only one tender remaining in contention, it was decided to fold the process and to commence a second process with the possibility of a more competitive market response".
A spokesman for the KPMG/McCann FitzGerald consortium confirmed it was excluded from the first tendering process because its submission arrived late. It tendered again when a second competition took place and was successful.
An "element" of the work involved in the repayments scheme - the inputting of scanned documentation onto a data capture system - will be carried out in India, it said.
When the matter was raised in the Dáil, the Taoiseach Bertie Ahern said all of the EU directives and tender requirements had been complied with by the HSE in the awarding of the contract.
About €340 million of an estimated €1 billion which will have to be paid in refunds would be repaid this year, he said.
Fine Gael's health spokesman in the Seanad, Senator Fergal Browne, claimed serious questions surrounded the Government decision to engage an outside company to oversee the repayments.
"It is now 16 months since the Supreme Court ruled on the illegality of these charges and yet not one euro has been refunded to the elderly patients involved. HSE claims that there was no delay in the tender process are simply false," he said.