Calvary receives first compensation payments after hospital takeover

The territory government is still negotiating with the Catholic health care organisation about the final costs from July's compulsory acquisition.

The organisation has put in several payout claims to the government around the acquisition but neither the government or Calvary will reveal what these are.

However, Calvary Health Care has already received $23.2 million in compensation with these payments related to costs associated with the transition, such as redundancy payments and data transfer.

"The ACT government will pay compensation to Calvary Health Care on just terms, which will include compensation for the termination of the contract and for the acquisition of part of the land," an ACT government spokeswoman said.

"At this stage, the ACT government has received several claims from Calvary Health Care. Those claims are being dealt with according to the process in the regulation."

The ACT government revealed its plans to compulsorily acquire the Calvary Bruce Public Hospital in May, saying it was to ensure the government owned a new $1 billion hospital it has planned to build on the site.

Legislation passed the territory's parliament in May and the government officially took control of the hospital on July 3. The government also developed a regulation to govern how compensation for Calvary would be determined.

Under the government's regulation, the territory is responsible for paying for the market value of the crown lease for the hospital land on acquisition day, any reasonable increase or decrease in the value of the hospital land and any costs incurred by Calvary through the transition.

But the regulation also recognises Calvary was given the land for free and it was held by the organisation at no charge. It also recognises that certain buildings and improvements on the land were funded by the territory.

If there is a dispute over the claim an independent expert must be appointed to decide the dispute. Legal proceedings cannot start while this expert has been appointed.

"A determination by a final expert is final and binding on the parties for the act and any court proceeding under the act but may be reviewed by a court of competent jurisdiction for legal error," the regulation says.

Property industry insiders have previously told The Canberra Times the acquisition could be valued at more than $200 million.

The territory government reached an in-principle agreement with Calvary to take ownership of the hospital in 2009 in a deal that was reportedly worth $77 million.

This deal was scuppered as the Little Company of Mary, the company which owns Calvary, had to seek approval from the Vatican.

Calvary and the government started new negotiations over the future of the hospital in 2022 as the territory is planning to build a new public hospital in Canberra's north.

These negotiations were based on what role Calvary would play in the new hospital but the government had some conditions. The territory wanted to own the title of the land where the new hospital was and wanted to manage the construction of the hospital.

Calvary agreed to these two conditions but did not agree with the government wanting to create a new, shorter agreement with the health care organisation.

The agreement had 76 years remaining but the government proposed a new agreement which would only be for 25 years.

The government had considered building the hospital elsewhere in the north but the Calvary site was the best location.

Calvary unsuccessfully attempted to challenge the government's takeover in court.

The hospital has been renamed North Canberra Hospital.