Calvary told ACT government it could build new hospital cheaper and quicker, documents reveal

The government also wanted more land than what Calvary was prepared to give to build a new northside hospital.

Calvary and the government were in negotiations over the role of the organisation in the future of a new public hospital for Canberra's north.

The government wanted to build the new hospital and Calvary had agreed to this request, but in a letter on November 28, Calvary's national chief executive Martin Bowles claimed Calvary could have built the hospital for a lower cost.

Mr Bowles pointed to a new 350-bed hospital the organisation built in Adelaide for $350 million. The government has planned to build a new $1 billion hospital on the Bruce site.

"Against a backdrop of current cost estimates of over $1 billion and completion by the end of the decade, Calvary could deliver the hospital faster and cheaper for you," he wrote.

The scope of the negotiations have been revealed in an affidavit from Mr Bowles which he filed in the Supreme Court as part of a challenge against the acquisition from Calvary.

The territory wanted to own the land on which the hospital was built, and Calvary had agreed to handing over four hectares of land, but the government said this was not enough to allow for a future expansion. Mr Bowles was critical of this.

"The land you requested is far more than what has been discussed or foreshadowed in the extensive meetings which have occurred between our teams and more than what is required for the new public hospital and expansion space," he said.

"This request ignores and thus prevents Calvary's aspirations for the site including our future planning which was based on the certainty that our existing agreement provided."

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A main sticking point in the negotiations was around the length of a services agreement between Calvary and the government. A current agreement has 76 years remaining but the government offered a new agreement for 25 years.

The documents have revealed the ACT government's argument for this.

A letter from Chief Minister Andrew Barr and Health Minister Rachel Stephen-Smith, on May 8, announcing the compulsory acquisition to Calvary, said the government could only offer a 25-year agreement due to procurement and probity rules.

"In making its offer the territory has sought to balance its long-standing relationship with Calvary and the existing Calvary Network Agreement with the government's probity and procurement obligations," the letter said.

"These generally require a periodic approach to market and would not support an agreement term longer than 25 years."

Mr Bowles said, in his November 28 letter, this represented a significant reduction and the government did not indicate if or how this would be compensated.

"Your letter doesn't provide any rationale for this reduction and fails to recognise the significant investments we have made on the basis of the existing contract," he said.

Ms Stephen-Smith wrote back to the November 28 letter in January to say the government was considering its options. In the May 8 letter, the government said they could not move forward.

"It is therefore clear from Calvary's response that there is presently no opportunity for the territory to achieve a negotiated outcome with Calvary on terms which meet the territory's objectives," Mr Barr's and Ms Stephen-Smith's letter said.

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