Melton Hospital: five of six cranes up and 150 workers a day on site

Structural works are progressing on the New Melton Hospital, with basement level concrete slab pours almost complete, first suspended floor slabs underway at ground and level one, and five of six tower cranes in place. Around 150 workers are on site each day.

Construction is on track for completion in December 2029.

The building is the visible part. The contract is the more interesting one: an availability-based public private partnership with a 25-year maintenance phase running past construction completion.

The essentials

Scope: 24/7 emergency department, intensive care unit, maternity and neonatal services, mental health services, surgical services, ambulatory care, clinical support including pharmacy, pathology and medical imaging, carparking, and teaching, training and research spaces.

The site sits inside the future Cobblebank Metropolitan Activity Centre, close to Cobblebank station and the Western Freeway.

Who won it, and who did not

Exemplar Health took the contract:

• Capella Capital — sponsor and investor
• Lendlease Infrastructure Investments and Invesis — investors
• Lendlease — builder
• Honeywell and Compass Group — facilities and maintenance managers

The unsuccessful shortlisted bidder was Wilam Marrga, comprising Tetris Capital, John Holland, ISS and Cushman & Wakefield.

Two bidders on a $1.1 billion social infrastructure PPP is a thin field, and consistent with what Infrastructure Australia has identified nationally: limited competition among Tier 1 contractors is itself a driver of cost.

What an availability PPP actually means for the supply chain

This is the part worth understanding, because it changes the commercial behaviour of everyone above you in the chain.

Under an availability-based PPP, the consortium is not paid for building the hospital. It is paid a service payment over 25 years, contingent on the facility being available to the standard specified. Payment can be abated if it is not.

Three consequences follow:

Quality is priced over 25 years, not at handover. A defect that costs the builder money once costs the facilities manager money for a quarter of a century. That aligns incentives around durability and maintainability in a way a traditional D&C contract does not — and it means specification scrutiny on materials, plant and systems is far heavier than subcontractors may expect.

Honeywell and Compass have a say in what gets built. The facilities and maintenance managers carry the operating risk, so they have standing in decisions about systems, access, and serviceability. Subcontractors proposing alternatives should expect them to be assessed on whole-of-life cost, not installed cost.

Financial close is the real start date. Contract award was July 2024; financial close November 2024; construction July 2025. A year between award and site start is normal on PPPs and routinely surprises subcontractors who resource against the announcement.

The all-electric decision

Melton is being delivered as a fully electric hospital — no gas.

For a facility of this scale that is a substantial engineering decision rather than a gesture. Heating, hot water, sterilisation and kitchen loads that would conventionally run on gas move to electricity, which increases electrical capacity requirements, substation and switchboard sizing, and heat pump plant.

It also sets a precedent. Victoria has a pipeline of health projects behind this one, and all-electric hospitals change the mix of trades on a health job — more electrical, more mechanical services, less gas fitting.

What to watch

1. Structural completion and facade start, which is when the subcontract mix shifts from civil and structure to services and fitout.
2. Whether December 2029 holds. Construction began July 2025, giving roughly four and a half years.
3. Victoria's broader health pipeline, and whether the all-electric specification carries across it.
4. The expansion provision to 554 beds by 2036 — designed-in expansion is future work, and the design decisions being made now determine how accessible it is.

Published 18 September 2026 · Updated 23 September 2026