They will have to fight off stiff competition from several other players, including Beacon Medical Group and Harlequin Healthcare, which submitted tenders by last Friday's deadline to build and operate several private hospitals attached to 11 public facilities around the country.

It is understood that the co-location plan, designed to ease chronic overcrowding by shifting 1,000 private beds out of public hospitals, has attracted considerable interest from top medical consultants attached to some of the 11 hospitals earmarked for development.

In addition to Limerick and Waterford, Bon Secours wants to co-locate new private hospitals at St James's Hospital in Dublin and Cork University Hospital. The group, the biggest operator of private hospitals in Ireland with 62,000 admissions last year, already has hospitals in Cork, Galway, Tralee and Dublin.

The Mater Private has tendered for sites attached to Dublin's Beaumont Hospital and University College Hospital in Galway, as well as Limerick and Waterford.

Harlequin Healthcare, which recently paid over 50m for Dublin's Mount Carmel Hospital, submitted expressions of interest in a number of locations by Friday's deadline.

"We've acquired three hospitals by acquisition, in Sligo, Kilkenny and now Mount Carmel, and our vision is to have seven hospitals in total, either through more acquisitions, greenfield developments or co-location, " said chief executive Joe Kelly.

"Mount Carmel has given us great confidence in our ability to negotiate these types of deals."

Beacon Medical Group is understood to have expressed an interest in up to eight of the co-located sites. Its interest is believed to centre on the big Dublin hospitals earmarked for co-location . . . Tallaght, St James's and Beaumont . . . as well as regional locations such as Waterford, Limerick and Cork.

The Health Service Executive, which is overseeing the co-location project, has asked developers interested in multiple location to indicate their order of preference. This has been interpreted as a signal that individual developers are unlikely to be given the green light at more than three locations.

The HSE has promised to draw up a shortlist of three contenders for each of the 11 locations by 17 July. The candidates will then be free to enter a process of so-called competitive dialogue with the public hospitals in the chosen locations to work out the numbers. This will result in revised tenders being submitted by the end of October.