A six chair renal dialysis unit at Bowral and District Hospital will be completed this year.
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Bowral and District Hospital general manager Ken Barnett said the new renal unit was part of the $55 million stage two redevelopment.
"We are expanding our safe, high-quality renal service for the Southern Highlands community," he said.
"We thank members of the Southern Highlands Renal Appeal for their support of the unit. South Western Sydney Local Health District is providing funding to support staffing and operational costs for the renal unit.
"The NSW Government invested $68.7 million in the Bowral and District Hospital stage one redevelopment, which officially opened last month, and includes a clinical services building, emergency department, new operating theatres, maternity unit and birthing suites."
In March 2019, the NSW Government announced an additional $55 million for stage two of the redevelopment. It has brought the total cost of the redevelopment to $120 million.
Wollondilly MP Nathaniel Smith previously told the Southern Highland News that it was the biggest investment in the Southern Highlands in a generation.
"People in this region can have the confidence that people will be treated with care for the rest of their lives," he said.