SAHMRI cancer bunker bailout revealed as Protom International seeks to ‘to double contract price’ with $US50m request; adds to Australian Bragg Centre crisis

Taxpayers are being asked to pay more than double a bailout for a world-leading cancer-­fighting facility as an American businessman defends his embattled firm’s work.

An embattled US company contracted to provide the machinery for a world-leading cancer centre in Adelaide is asking for South Australian taxpayers to more than double their contribution to the project – up to an extra $77m.

The country’s first proton beam therapy unit, to be located in the $500m Australian Bragg Centre, is on the brink of financial collapse amid fears it is at “significant risk” of failure.

US firm ProTom International (PTI), which is embroiled in an international dispute with the South Australian Health and Medical Research Institute, wants extra funds for its Radiance 330 machine.

Former Premier Jay Weatherill (left) and ProTom CEO Stephen Spotts during a visit to the Tonsley Innovation District at Clovelly Park in Adelaide, Thursday, March 8, 2018. Picture: David Mariuz

Sources close to the project have revealed the Boston-based firm wants additional funds worth up to $US50m ($A76.66m).

Treasurer Stephen Mullighan refused to comment on the “commercial in confidence” requests.

He has revealed thecompany had asked for “more time” and a “significant” bailout after it received a $A68m ($US44.4m) taxpayer grant in April 2017.

PTI, which denies any wrongdoing, has also asked for more than 12 months extra time to meet its obligations, sources added.

Authorities have grave concerns at the project’s future after key worker departures, putting at significant risk SA’s exclusive rights to such treatment.

The project has already been hit by Covid-19 travel restrictions, inflation and a 35 per cent tariff – or import tax – because some of its critical equipment is from Russia.

SAHMRI, acting on state Treasury advice, is so far refusing to pay more public funds to PTI, which operates the cutting-edge technology only at one other location – Massachusetts General Hospital, Boston.

Treasury chief executive Rick Persse last week told parliament talks were ongoing.

MPs heard the North Tce centre, in a four-storey concrete “bunker”, is already facing a two-year delay. It would treat mostly pediatric patients.

One of the world’s biggest multinationals, Hitcachi, is in secret talks as a potential white knight.

The proposed Australian Bragg Centre proton therapy unit spearheaded by the South Australian Health and Medical Research Institute. Picture: SAHMRI.

The project was originally due to open at the end of last year and treat more than 700 patients a year.

Mr Persse said he dispatched a high-level group to travel to Boston in January for crisis talks. While PTI chiefs also have not publicly commented, founder Stephen Spotts, 69, said the company was entitled to more money because of original clauses that could be renegotiated.

Mr Spotts, left, with former Premier Jay Weatherill at the Tonsley Innovation District at Clovelly Park in Adelaide, Thursday, March 8, 2018. Picture: David Mariuz

Mr Spotts said his former company was entitled to more public money. Picture: David Mariuz

Mr Spotts, who retired as chief executive in October 2022 – and has no knowledge of current operations – said the original terms were “draconian”.

He said this included “requiring ProTom to be the bank” as it did not have half the contract paid up front to help its manufacturing.

He would not discuss internal company finances but said the firm was losing money when he left, although it was “close to” profitability.

“I absolutely believe the company has a legal right to receive more money,” he said.

“But you know, there’s this loggerhead that now puts the entire project in jeopardy and I just hope that cooler heads will prevail.

“The citizens of South Australia will be asking their MPs, you know, what the heck’s going on here? Let’s get on with this thing. I’m hopeful that will happen. Maybe it won’t.”

Mr Mullighan’s spokeswoman said the PTI contract was “with SAHMRI” but reiterated PTI has “requested more time and significantly more money to complete their contract”.

“There are a range of commercial and legal considerations which limit the amount of information which can be provided while discussions with ProTom continue,” she said.