Emergency services are currently on the scene of a fire at Kenmore Hospital.
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Fire and Rescue NSW received a call about a fire at the abandoned psychiatric facility on Taralga Road at 4.30pm.
A FRNSW spokesperson said one of the buildings was "totally engulfed in fire" and firefighters were currently "standing outside the building putting water on it to extinguish".
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The spokesperson said the fire measured around 30 metres by 50 metres.
Exclusion zones are in place with NSW Ambulance and Hume Police on the scene.
Rural Fire Service Southern Tablelands operational officer Mitchell Butler said there were 24 RFS personnel on the scene in addition to FRNSW crews.
He said upon arrival found a two-storey structure well alight and they were still working to extinguish the blaze.
The fire has been contained to one building.
An eyewitness at the scene said it was the former female section of the asylum, now known as ward 15.
A resident on Wollondilly Avenue said they heard a boom sound at around 4pm before they came outside and saw the fire.
They said vandalism was a regular occurrence in the Kenmore area.
Historian Phil Leighton-Daly lamented the latest blaze.
"It's disgraceful that nothing has been done beforehand (to prevent this happening)," he said.
"If it can happen in one ward, surely some effort could have been put into saving more of the wards. In my mind, it's not a priority building. (However) it's a lovely, inspiring building but doesn't have the kind of grandeur that others have."
Mr Leighton-Daly has raised concerns in the past few years about "neglect" of buildings in the state significant site, the core buildings of which were designed by Walter Liberty Vernon from 1895.
Xiao Liang Wen of Australia China International Holdings Pty bought the property in 2015. It was sold by the state government to another company, Longreach Capital Pty Ltd, in 2003 and has passed through several different owners since.
In November, 2020, the NSW Heritage Office commenced a "compliance investigation" of the site to ensure the owner was meeting minimum obligations surrounding the property's safety and security.
It followed representations by Goulburn MP Wendy Tuckerman to Arts Minister, Don Harwin, on the back of community concerns.
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