SA’s cancer hub’s big setback as facility is unlikely to open for at least another two years

Mystery surrounds the opening for the country’s first proton beam therapy unit as it is on the brink of financial collapse.

A world-leading cancer facility is unlikely to open for at least another two years, parliament has heard, as authorities faced questions about a “hands off” attitude.

The $500m Australian Bragg Centre, formerly SAHMRI 2, is under a cloud amid mounting concerns the country’s first proton beam therapy unit is on the brink of financial collapse.

The South Australian Health and Medical Research Institute project is facing cost and deadline blowouts amid an international contractual dispute with US firm ProTom International (PTI).

But a state parliamentary committee on Wednesday heard a unit will not open until mid-2026 even if contractual problems were resolved today and even if a different company supplies the cutting edge-technology.

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

The North Tce facility, the southern hemisphere’s first, was originally due to open in December last year in a four-storey concrete “bunker” in one of Adelaide’s most expensive buildings.

MPs on Wednesday heard the state government had been “monitoring” the landmark project since October 2018 but concerns were raised a year ago about “supply chain” issues.

Global “restrictions” were slapped on key Russia-based equipment in response to the Ukraine war, the Upper House’s Budget and Finance Committee was told.

But alarm bells loudly rang in January this year when Boston-based PTI asked SAHMRI officials for more time and money to deliver its $68m contract.

Official concerns also mounted as the company hired its third company chief executive in 18 months, MPs heard.

Under questioning from committee chairwoman, Liberal MP Heidi Girolamo, Treasury’s Commercial and Economics division executive director, Brad Gay, said it would take at least two years for any provider to deliver the facility.

“The nature of the technology is that there is an extensive commissioning period, not just to make sure that the beam achieves its medical requirement but also that it speaks to the system which needs to hold the data and all those sorts of things,” he said.

“There is a commissioning period followed by a ramp-up period.

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

“On day one, the patients don’t come in and start moving through quickly, they need to go through a bit more slowly and ramp up to a higher number.”

Ms Girolimo asked why Treasury was “quite hands off” until January despite potential taxpayer cost, Mr Gay replied: “There is definitely an issue at the centre of this, which is that the state has liability for outcomes which it has limited control mechanisms over; that’s right.”

Treasury chief executive, Rick Persse, would not be drawn on comments from Premier Peter Malinauskas in April last year that the therapy unit was on track to be opened by 2025 nor reveal details on any talks with other providers.

But he revealed he ordered a high-level government delegation travel to Boston in January for crisis talks with the company, which filed for voluntary “chapter 11” bankruptcy in 2015, over concerns about his structure and future.

He dispatched his second-in-command Tammie Pribanic, who travelled with SA Health deputy chief executive Sinead O’Brien, SAHMRI’s director Maria Makrides and project member Julia Green.

“We weren’t receiving, until more recent times, formal advice from ProTom International, the contracted party who were delivering this very complex project, that they were unable to deliver it under …(agreed) terms,” Mr Persse said.

“Instinctively when a counterparty changes its chief executive almost overnight, and there are key personnel changes, which is one of the things that would generally make our ears prick up and it was that which precipitated my decision to send Tammie across.”

He said talks were ongoing but the government wanted the bunker to start treating patients.

After the hearing, Opposition spokesman Matt Cowdrey said it was “alarming” that Treasury officials appeared to have their “hands off the wheel” with overseeing the contract.

Treasurer Stephen Mullighan said it was wrong for the opposition to “now blame Treasury officials for the problems of the proton therapy project”.

“The government is working with the SAHMRI to help it get the project back on track and to minimise the massive financial exposure to taxpayer the former Liberal government signed up to in 2020 for the Australian Bragg Centre building,” he said.

Former ProTom International CEO Stephen Spotts has revealed the root issue behind Adelaide’s trouble in implementing the proton facility.

“The problem initially started when we were awarded the contract in April 2017 but the contract was not consummated because of the hoops we were forced to jump through until May 2020 – that’s not being reported,” Mr Spotts told ABC Radio Adelaide.

“If we had known that it was going to take three years from legal award of the contract to actually closing the deals and getting the first tranche of money, we probably would never have agreed.”

The Covid-19 lockdowns, the Russia-Ukraine conflict and the subsequent inflated material costs have compounded the initial fixed price tender, creating a financial crisis, Mr Spotts explained.

He believes the company is simply waiting to receive money from the Treasurer because Mr Spotts knows the proton parts were ready to be assembled before he retired.