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Harney was asked to pay hospital chief €2.5m

THE former chairman of the National Paediatric Hospital Development Board (NPHDB) Philip Lynch asked Health Minister Mary Harney to break public-sector pay rules to award the board's chief officer €2.5m over five years.

Mr Lynch was involved in a high-profile spat with Ms Harney last year over the funding and proposed Mater Hospital location of the €650m National Children's Hospital.

A key concern raised by the businessman was the lack of funding for the project, which needs to raise €110m from charitable sources.

Not a single brick of the new hospital has been laid, but the project has already cost the Irish taxpayer €30m in contracts, salaries, private public relations and planning.

But documents obtained by the Irish Independent showed that Mr Lynch had no such concerns about funding when it came to awarding a massive salary to the project's CEO.

In a letter written to Ms Harney dated June 26, 2007, shortly after the NPHDB was established, Mr Lynch called for remuneration to be "in the order of €500,000 pa" on a contract/non-tenured basis for a fixed-term five-year period.

The salary would have been more than the amount paid to the head of the HSE.

Mr Lynch's letter said: "While I acknowledge that the salary proposed falls considerably outside the public-sector norms, it reflects the board's anxiety that this project be advanced at a more commercial-like pace driven by attendant ability and skills."

Mr Lynch also outlined that the board would be happy to consider "an array of potential facilitating mechanisms for effecting the appointment".

The pay packet would have made the CEO one of the highest paid members of any state board in the country, higher even than that of Cathal Magee, CEO of the HSE, who is paid €415,000.

The proposal was eventually rejected and the position was filled by former deputy CEO of St James's Hospital, Eilish Hardiman, in September 2008, who got a salary of €125,046.


A spokesman for the Department of Finance said that Mr Lynch's proposal would have broken remuneration rules.

Defending the proposal, Mr Lynch said last night the amount reflected the need for the board to appoint a candidate with a strong background in construction to the position, which, he said, would save money in the long run.

He said: "It's very simple -- it was a job to attract someone with superb can-do knowledge and know-how."

It is still not certain if the 445-bed children's hospital will go ahead. The project has still not received planning permission.

A series of meetings have yet to take place with planners before a formal application can be lodged.

Irish Independent