A New South Wales parliamentary committee has recommended terminating the public-private partnership (PPP) at Calvary Mater Newcastle and transferring ownership and management of the hospital directly to NSW Health. The recommendation follows an inquiry into longstanding infrastructure, maintenance and safety problems at the Newcastle hospital.

The inquiry identified persistent water leaks, mould, non-compliant external cladding and outdated heating, ventilation and air-conditioning systems. These issues contributed to ward closures and patient relocations, including disruptions linked to mould contamination. The committee concluded that the hospital’s complex PPP structure had made it difficult to establish responsibility for repairs and costs.

The PPP was established in 2005 through a contract between the NSW Health Administration Corporation and Novacare. The 28-year agreement covers the hospital’s redevelopment, facilities management and various non-clinical services and is scheduled to run until November 2033. Calvary operates the hospital’s publicly funded clinical services but is not a party to the main PPP contract, creating a separation between clinical operations and infrastructure responsibilities.

The committee found that this divided responsibility contributed to delays in addressing major defects. It recommended that the NSW Government terminate the PPP and bring the hospital under direct NSW Health control. It also called for a review of all existing health PPPs in NSW to assess whether governments have sufficient oversight and intervention powers to protect patients and staff. Meanwhile, the NSW Government has already intervened directly to accelerate remediation works at Calvary Mater. Replacement cladding has been installed on parts of the Mater Institute building and South Block, following years of delays and infrastructure problems.