newy.com.au – A NSW parliamentary committee has recommended terminating the public-private partnership at Calvary Mater Newcastle and bringing the hospital’s ownership and management directly into NSW Health after finding the arrangement contributed to years of infrastructure failures.
The upper house committee handed down its report on Wednesday, making seven recommendations to the NSW Government. It also called for a review of every existing health PPP in the state to determine whether adequate oversight and powers of intervention were in place to protect patients and staff.
Committee chair Amanda Cohn said the inquiry had uncovered serious shortcomings at a hospital where patients and employees should have been able to expect a safe environment.
“The committee has heard shocking evidence about how the Calvary Mater Hospital fell drastically short of these basic standards and consequently put patients, staff, and the public at risk,” Dr Cohn said.
The inquiry examined persistent leaks, mould, non-compliant cladding and outdated heating, ventilation and air-conditioning systems, as well as the disruption caused when infrastructure problems forced wards to close and patients to be moved.
It found the complicated contractual structure had left the organisations involved arguing over responsibility and cost instead of resolving the problems.
“The inquiry exposed a deeply flawed PPP model at the hospital, where a convoluted contractual framework directly contributed to years of infrastructure failures,” Dr Cohn said.
“The result of this repeated inaction has been devastating.”
The Mater arrangement separates clinical care from responsibility for much of the hospital’s infrastructure. Calvary owns the campus and operates the publicly funded hospital services, while the NSW Health Administration Corporation contracted private consortium Novacare under a deal signed in 2005.
That contract covers the redevelopment, maintenance and non-clinical services at the hospital and is due to continue until November 2033. Novacare has subcontracted building maintenance and other services, including cleaning, catering and security.
Calvary has previously told the inquiry it was not a party to the central PPP project deed and could report problems but could not compel the private contractor to undertake major repairs. The committee found the arrangement prevented clear accountability and the timely resolution of infrastructure failures, eventually leaving the government to carry the cost of remediation.
The report was released one day after the government announced that replacement of non-compliant cladding had been completed on the Mater Institute and the southern facade of South Block, which houses clinical and health support services.
The government stepped in earlier this year to engage contractors directly after breach notices and commercial negotiations failed to produce timely repairs. The hospital has remained open during construction, with further facade work continuing across the campus.
The inquiry also examined an April proposal from Novacare to transfer the private companies behind the PPP to the state for a nominal $2. The offer did not involve Calvary selling the hospital or its land back to the government.
The government rejected that proposal, saying it had been given insufficient time and information to assess Novacare’s liabilities, outstanding disputes and financial position. The committee has now gone further, recommending that the PPP itself be terminated and the hospital brought directly into NSW Health as soon as reasonably practicable.
