COMMENT BY GREG RAY

In Newcastle, NSW, the main cancer treatment hospital has a problem with potentially hazardous mould. The private consortium that manages the hospital for the state government allegedly knew about the problem for six months but didn’t fix it or even tell anybody. Immuno-compromised cancer patients plus Aspergillus mould. What could possibly go wrong?

There are reports of cancer patients and their families planning class actions against the hospital, arguing that even if the hospital management couldn’t be bothered fixing the problem, it should have warned the public of the danger so patients could have found somewhere safer to be treated. The NSW Health Minister, some bloke called Ryan Park, has been contacted repeatedly about the problem and reckons it’s fine to leave it in the hands of the investors who manage the Calvary Mater Hospital under a public private partnership agreement (PPP). He doesn’t think a public investigation or inquiry would be any use.

“Novacare” – the private consortium that runs the hospital – comprises four companies: Westpac Banking, Abigroup, Medirest and Honeywell, which is responsible for the building’s maintenance. Honeywell reckons it “didn’t see” documents warning it of the mould problem in October 2024 but only found out following “routine testing” in April 2025. When it did finally find out, it “supported the hospital’s implementation of comprehensive control measures”. “Honeywell remains committed to meeting all maintenance obligations in full compliance with Australian standards,” it corporate-spoke. Actually, the hospital had been making unfortunate headlines for some time before all this, thanks to water leaks and other issues, but that’s probably all ok under the contractual standards, I guess.

Keolis is a real downer

Also in Newcastle, NSW, residents of Stockton, on the north shore of the city ‘s harbour, have relied for decades (a century, really) on ferries to get them to and from town. There are currently two ferries, the MV Hunter and the MV Shortland. The Hunter has been out of action for almost a year because of mechanical failure and the Shortland, which has been doing twice its usual workload, is also experiencing “issues”. The most recent breakdown saw the Shortland out of action for six days, forcing residents and other ferry users to take a long detour via bus.

Newcastle’s buses and ferries were publicly run for many years but the government decided to privatise the services in 2016, handing them over to the French firm Keolis. (Keolis was initially in partnership with Australian infrastructure investment group Downer, but this arrangement is being terminated, leaving the French in sole control.)

Apparently Keolis hasn’t been able to figure out how or where or when to fix the first broken-down ferry, but now both of them are stuffed it reckons it will get everything sorted before Christmas. No comment from the NSW Minister for Transport, but the department issued a slab of corporate-speak that said Keolis had “continued to meet its contractual requirements to maintain the vessels in line with strict safety, inspection and servicing standards”.

This is part of the beauty of privatising public services. They can fail, miserably, and it’s nothing to do with the government that flogged them off. Contractual requirements are met (sorry, you can’t see the contract, it’s secret) and even though the services are broken and failing it’s all actually perfectly fine. No further comment, go away.

Ever since Keolis got Newcastle’s buses there’s been a more-or-less constant stream of complaints. The buses are late, or they leave the stops earlier than their scheduled time. There are no warnings of cancelled services. Parents have driven their kids to school instead of relying on buses that may or may not appear. Some routes are indirect and meandering, taking ridiculous times to get from A to B.

Keolis also runs the city’s “light rail”, a dinky little 2.7 km link that runs down the main street from the heavy rail interchange to the east end. This service is also often out of action, or running at reduced capacity due to any number of electrical, mechanical or structural failures in the Spanish-built tramcars. A common comment from users of the service is that it’s often quicker to walk than wait for the unreliable, breakdown-prone tramcars which may or may not turn up.

All aboard the Lie Trail

When then transport minister Andrew Constance opened the light rail service in 2019, he famously wore a white elephant tie-pin. It was already that obvious. Honestly, they may as well have just left the buses to do that teensy little run like they had been doing since the year dot. Would have saved hundreds of millions of dollars.

Newcastle’s Euro-toy light rail was paid for with funds from, wait for it, the privatisation of the Port of Newcastle – one of the world’s major coal export ports. The port is 50 per cent owned by China – with the other 50 per cent now held by something called “The Infrastructure Fund”, which I gather is Australian money. Maybe.

Part of the port sale deal involved a secret clause that barred Newcastle from competing with Sydney for container business, and the government lied for years, pretending this secret clause didn’t exist. When they could no longer deny the truth the buggers weren’t even embarrassed or ashamed.

The Euro-toy light rail replaced a section of existing heavy rail line that the government wanted to close because property developers wanted the land to build on. They wanted the rail corridor because it was the only part of the city that didn’t have coalmines underneath it, so you didn’t have to “grout” the old mine workings as part of building on the land. That’s why Newcastle got the light rail (some locals still call it the “Lie Trail”) and that’s why this breakdown-prone white elephant runs smack down the middle of the main street, wiping out parking spaces and freaking out car drivers. (I might mention as an aside that there used to be a special “grouting fund” to help developers utilize other land in the city, but the Minns Labor government cancelled this almost as soon as it got elected.)

Privatisation has certainly been a boon for the people of Newcastle, as you can see. But it gets better. The state government also flogged off the power stations that supply the state’s electricity. Most of these were in the Hunter Valley. It also flogged off the state-owned coalmines that supplied fuel to run the power stations, so now the power stations have to pay world prices for coal, putting even more pressure on electricity prices. It flogged off power retailers, getting such wonderful prices that a CEO of one of the new corporate owners could boast of being cash-flow positive from day one. There’s more, but you get the picture.

Why do some governments love privatising public assets? Maybe they’re hungry for one-off cash hits, want to escape recurrent costs and maybe they don’t care very much about the quality of services to citizens. Maybe they are hijacked by business interests hungry for profits and are cowed by a media owned and directed by those self-same business interests.

Whatever the reason I think it’s fair to say that the jury of Newcastle public opinion has delivered its verdict on privatisation: a failure by every measure that matters.