Nexus Hospitals will not build the Tasman Private Hospital due to a predicted $120m+ price tag

The political blame game has begun over the cancelled New Town private hospital, with one Hobart Alderman pointing the finger at “anti-development forces”. LATEST

3D diagrams produced by the Hobart City Council of the proposed Tasman Private Hospital

A Hobart Alderman has blasted “anti-development forces” in response to a cancelled private hospital project, while the Lord Mayor hopes the site can be used for public housing.

As revealed by the Mercury,the proposed Tasman Private Hospital in New Town will not be built.

Nexus Hospitals cited the exploding cost of construction and interest rates as the reasons it has abandoned the project.

The project was predicted to cost more than double the original $60m estimate.

Alderman Simon Behrakis blamed the cancelled hospital on “the anti-development forces on the Council”.

“If Council worked with developers to get this project underway in 2019 when it was initially brought to us, rather than two years later, it would likely be built by now,” Mr Behrakis posted on social media.

Simon Behrakis. Picture: Kenji Sato

“The result is much needed health infrastructure not being built. The site will remain empty for the foreseeable future, so at least the NIMBYs will be happy.”

The hospital was approved by council in 2021, with minimal community opposition, after Nexus modified designs to remove one level from the building.

Lord Mayor Anna Reynolds took to X, formerly Twitter, to express her hopes for the vacant site.

“Maybe Tassie Govt could purchase the site with this new federal housing cash? Doubling building costs is a common story - it’s why there’s a slowdown in construction starts across the nation, but worse in Tassie because of a smaller number of companies.”

Ryan Posselt, paramedic and Councillor for Hobart City Council. Picture: Nikki Davis-Jones

Councillor Ryan Posselt said the end of the project was a blow to the health system.

“This is terrible news for Tasmanian health. Not many know that the state government had struck a deal for this facility to include a brand new public renal dialysis unit. So what now for the patients who suffer through 3x week through receiving treatment in a dilapidated not fit-for-purpose facility?! Could this be a true public urgent care centre, with newly built public dentistry and day surgery hospital?,” Mr Posselt posted.

$120m+ blowout: New Town private hospital project abandoned

August 18, 5am: The proposed Tasman Private Hospital in New Town will not be built, with the project set to cost more than double the original estimate.

Initially costed at $60m, the hospital was to be built by Nexus Hospitals.

Demolition at the site of the former WIN TV studios in New Town Rd began in March.

But since the buildings were levelled, the site has remained vacant.

In a letter to local residents dated August 16, Nexus CEO Andrew Petering said the hospital would not be built and the land would be put on the market.

“We have explored many options to address the significant commercial headwinds faced by the project. The most material of these impediments has been the cost of construction more than doubling since 2021, and significant interest rate increases over the last 12 months,” Mr Petering said.

An artists impression of the proposed Tasman Private Hospital in New Town. Picture: SUPPLIED

“In seeking solutions, Nexus has not been prepared to compromise on the quality of the facility or the additional services we want to provide to the Tasmanian community. Whilst we have been able to address some of the cost pressures, we have unfortunately been unable to bring the project back to financial viability. As a result, it is with much regret that I advise we have had to cancel our plans to build the Tasman Private Hospital for the foreseeable future.

“Given the resultant uncertainty to the project timeline, the property investor, North West has made the difficult decision to place the New Town Road property on the market. As a result, any consideration to a future hospital development would require a comprehensive redesign on a different site.”

A joint venture with Tasmanian construction business Contact Group, the Tasman Private Hospital was to comprise an integrated medical centre and hospital, including seven operating theatres and a 26-bed overnight ward.

The building was also set to house a general practice, radiology and pathology services.

The project received approval from Hobart City Council in March 2021 after plans were revised in response to community opposition.

3D diagrams produced by the Hobart City Council of the proposed Tasman Private Hospital

The project was initially proposed in 2019 with an estimated cost of $50m.

Council rejected Nexus’ initial planning application after a fierce campaign by local residents concerned with the size of the hospital and its impact on surrounding homes.

A second application in 2020 was deferred, before Nexus submitted a third iteration of the hospital in 2021, removing a floor from the building in a bid to get it over the line.

The project had the backing of Coordinator General John Perry, who wrote to Hobart City Council in support of Nexus’ application.

The cancelled project will be a blow to Tasmania’s stretched health system.

The New Town hospital had support from the medical community given the extra capacity it would provide for day surgery and other services.

Mr Petering said Nexus remained committed to Hobart Day Surgery, servicing approximately 10,000 patients a year.

“Our focus will now shift to the requisite investments to ensure we continue to deliver a world-class service at Hobart Day Surgery,” he said.