The Weatherill Government has “guaranteed” the site of the Repatriation General Hospital will be retained for health or social housing, calling for expressions of interest from the private health sector for its future use.

Veterans’ Affairs and Acting Health Minister Martin Hamilton-Smith said the registrations of interest process would run until May 22 to determine “how the existing facilities might be used by (the private sector) for a supported accommodation and health precinct for decades to come”.

“This is the best of possible outcomes,” he said.

“The Government is categorically ruling out this site for any commercial development; you’ll not be seeing a Costco, a Bunnings or a Woolworths at this site, I make that crystal clear.”

But Opposition Leader Steven Marshall said there was no way the Government could guarantee the site’s future use if it sold it off.

“We now have real clarity into the Government’s thinking regarding the Repat,” he said.

“They want to flog it off and get their hands on the money.”

Marshall said it was a “galling” move “in a week we as a nation commemorate the centenary of Anzac”.

Hamilton-Smith said the Government had been approached by “quite a number of private health stakeholders interested in this site”, and was now “formalising arrangements” to continue its use for aged care, supported accommodation – with a likely focus on the veterans’ community – and health care, potentially incorporating a private hospital “of one form or another”.

“It’s always been our intention to keep this precinct open for business as a health precinct and a retirement homes precinct,” he said.

“We are listening to veterans.”

In that he includes those veterans camped out on the steps of Parliament House, protesting against the planned Repat closure.

Hamilton-Smith said he had spoken to the protesters, optimistically noting that “we both want the same thing”.

“We all want the best outcome for veterans’ health,” he said, although he baulked at their demands for broader Transforming Health expenditure to be shelved and the money instead poured back into the Repat precinct.

“I think a lot of stakeholders in the health system would have strong views on that,” he said.

“(But) I get where they’re coming from, I really do.”

Protest organiser Augustinus Krikke told InDaily the minister’s private sector solution was “not good enough” and the veterans intended to continue their demonstration “until such time as they meet our demands”.

“They broke it, now they can fix it,” he said.

“Put it back the way it was and run it the way it was meant to run, not close it down.”

Hamilton-Smith conceded the Repat was “a special place for veterans”, saying he expected much of the existing infrastructure could be retained.

“There are good facilities there that would be quite suitable for the health precinct,” he said, noting these included “those beautiful old buildings out the front”, along with the chapel, memorial gardens and hospice.

Under the Transforming Health changes, rehabilitation services will be moved to a purpose-built facility at nearby Flinders Medical Centre, while acute clinical services will be farmed out to other sites from 2017.

The minister said there would be “no movement of Government services from this site for a very long time” and that “whatever happens at this site will be subject to the most thorough and exhaustive consultation with veterans and clinicians”.

He has expressed a personal desire to rebuild the Ward 17 post-traumatic stress disorder centre on site, but that decision has been referred to a panel of clinicians and veterans’ representatives.

“(The Repat) is sacred ground for veterans … this is quite an exciting opportunity to retain the special character of the Repat precinct,” he said.

Veterans advocate and former head of Veterans SA Bill Denny decried the “masquerade” of a consultation process that led to today’s outcome, saying ex-service communities had taken the process “very seriously”.

He said veterans were “pragmatic” and “understand there may be aspects of the Repat that are beyond economic repair”, but now felt their feedback wasn’t adequately considered.

“It’s disrespectful…at a time when we appreciate what veterans have done for this nation,” he said.

He believes a private health or housing hub may be “a little bit of sugar with the medicine”, noting that other proposals, such as a dedicated veterans’ precinct, appear to have not been considered.