Taxpayer faces multimillion euro bill over axed co-location plan
The decision was made yesterday by the board of the Health Service Executive (HSE) following a meeting with Health Minister Dr James Reilly, which also signalled a shake-up of senior HSE management.
However, the state faces the likelihood of being sued by the Beacon Medical Group (BMG), which has spent more than €30m on the project. BMG was awarded three co-location contracts at Beaumont Hospital in Dublin, at Cork University Hospital and at the Mid West Regional Hospital in Limerick.
It was a requirement that each successful bidder posted bonds or guarantees of €10m. BMG also paid three non-refundable deposits of €350,000 each to build the hospitals and has spent more than €30m on the projects.
The issue of potential loss of earnings may also cost the state given the project has dragged on for more than five years, despite being trumpeted by former Health Minister Mary Harney as the fastest way to add 1,000 extra beds to the public hospital system.
Synchrony, a consortium headed up by businessman Fergal Mulchrone, was behind a fourth co-location project at St James’s Hospital in Dublin.
The project agreements between the HSE and the successful bidders — signed in 2008 — had their expiry dates extended a number of times, most recently up to March 31.
A spokesperson for the HSE said: “The HSE can confirm that the extension on the contracts for co-location expired today, March 31.”
BMG had applied for an extension until November this year, but this was not granted. Official letters notifying BMG and Synchrony of the decision were posted out yesterday. Once opened, BMG and Synchrony would have held a 65-year lease on each site.
BMG had promised a €748m investment catering for 30,000 patients a year and 2,800 direct and indirect jobs once the hospitals were operational. A spokesperson for BMG said they had “no comment to make at this time”.
Synchrony was planning a facility with 195 in-patient beds, 72 outpatient beds and eight operating theatres at St James’s.
