Developers of private hospitals have won a multi-million pound tax break from the Government through a late change to the Finance Bill which was passed virtually unnoticed last week.
Listed as Section 64, the concession means that developers will be able to write off over seven years 100 per cent of the costs of building or refurbishing private hospitals, and of the cost of equipping them.
The change could mean a £21 million windfall for a consortium led by a Blackrock Clinic consultant, Mr James Sheehan, if changes are made to its plan to build a £60 million hospital on the outskirts of Galway.
The decision of the Minister for Finance, Mr McCreevy, to put down a late amendment to the Finance Bill followed determined lobbying by several politicians, including the Minister of State, Mr Eamon O Cuiv, on behalf of the Galway consortium.
"He has received representations over the last number of years from people who wanted to get projects up and running. The cost to the State is £7 million for a £20 million hospital," a Department of Finance spokesman said.
In order to qualify, a hospital must have a minimum of 100 beds, all-year surgical and medical services, an accident and emergency unit and '`at least" five specialist services, such as oncology or cardiology.
In return for the tax break, 20 per cent of beds in a hospital must be available for public patients, and it must offer a 10 per cent discount to the Department of Health on the fees charged for public patients.
During the first six years developers will be able to write off 15 per cent of the capital costs annually. The final 10 per cent will be available for the seventh year. The reliefs will have to be paid back if the building ceases to be a hospital within 10 years.
The allowances will be limited to £25,000 a year for so-called "passive investors".
Last night the Labour TD, Mr Derek McDowell, said the amendment had never been mentioned to him. "We got 50 pages of amendments at the last minute. It's typical. Normally I would get some briefing, but this time I did not," he said.
An application for planning permission to Galway Corporation for the hospital at Doughiska failed in January when supporters were unable to get the two-thirds majority necessary to alter the city's development plan.
Disappointed, Mr Sheehan indicated then that the project was dead. However, he was urged to reconsider by several Galway city politicians, including the Fine Gael senator, Mr Fintan Coogan. The hospital would be a major boost for Galway, he said.
The original plan for the Doughiska hospital provided for diagnostic, intensive care and operating services, along with radiology, angiography, physiotherapy, in-patient care for 60 patients, 30 convalescent beds and 36 consulting units.
Last night the Labour TD, Mr Michael D. Higgins, said information had been difficult to get about Doughiska. "There is land zoned for institutional use near the Merlin Park public hospital. There has never been a satisfactory explanation about why this site could not be used.
"And it has never been made clear if the consultants would just transfer from existing hospitals. If that was the case, then surely it would mean that the public lists would just get longer and longer?" Mr Higgins said.
