Oireachtas committee: Management at Beaumont Hospital, Dublin, was sharply criticised at the Public Accounts Committee yesterday over a car-park scheme which resulted in losses to the Exchequer of up to €13 million.
The committee was examining a highly critical value-for-money audit of the initiative by the Comptroller and Auditor General, Mr John Purcell. Flaws he highlighted were criticised yesterday by committee members and Department of Finance officials.
Mr Purcell also said he had "no doubt" that a similar car-park scheme at Tallaght Hospital had resulted in a loss to the Exchequer. Mr Purcell did not speculate on the possible loss to the Exchequer in that case.
While he did not audit Tallaght Hospital, he said the scheme at that hospital was the model used at Beaumont. It was revealed at the hearing that an unnamed project manager engaged by Tallaght Hospital had suggested the Beaumont initiative to its management.
The multi-storey car-park at Beaumont was built by a private company, Winston Properties, which entered a joint venture with the hospital in 1998. The scheme provided an additional 230 parking spaces at the hospital. Winston is controlled by a British-based group, Howard Holdings.
Directors of the Howard Holdings include the Cavan-based businessman, Mr Brendan Murtagh, who is also director of the building products company, Kingspan. Other directors include a Cork businessman, Mr Frank Boland, and a Co Meath-based accountant, Mr Brian Joseph Madden.
The company availed of tax breaks when it funded the construction of the car-park. These meant it could claim allowances equivalent to twice its rent payments when calculating tax. Mr Purcell said the public finances were worse off by €9-€13 million as a result of this.
"As is often the case, somebody loses in these so-called win-win situations. The big loser in this case was the Exchequer," Mr Purcell said.
He also noted that Beaumont had received only €120,000 in rental income from the car-park. While the projected income was €1.8 million, Howard Holdings had levied almost the same amount in fines for cars illegally parked at the hospital. The hospital was charged a multiplier of the all-day parking charge in the car-park because, theoretically, each place would be used more than once in a day.
The committee chairman, Mr John Perry TD, described the involvement of Howard Holdings as akin to "winning the Lotto". His Fine Gael colleague, Mr Paul Connaughton TD, said only "Sherlock Holmes" could unravel the deal. "It's the most intricate piece of cobweb work I've seen for many a year," he said.
Beaumont's chief executive, Mr John Lamont, conceded that the hospital's accounting and reporting mechanisms had broken down. He believed this was due to a concentration on medical duties. Noting he was not chief executive in 1998 when the hospital entered the deal, he said he did not agree with this.
He said the hospital had entered an agreement with Howard Holdings in that it would recover "some" of its losses.
Mr Purcell's audit said the tax-based funding method was more costly than direct provision of the car-park. He found the concession offered by Howard Holdings offered far less income at a higher turnover than the two alternative options.
Fianna Fáil TDs Mr John Curran and Mr Sean Fleming said the Department of Health should require institutions to examine implications for the Exchequer when considering options.