SAMRHI’s new multimillion-dollar taxpayer bailout revealed after Bragg Centre cancer bunker fiasco

South Australian taxpayers have funded a new multimillion-dollar bailout to the state’s embattled medical research institute.

South Australian taxpayers have funded a new multimillion-dollar bailout to the state’s embattled medical research institute.

South Australian taxpayers have funded a new multimillion-dollar bailout to the state’s embattled medical research institute as a financial “Mr Fix-it” battles a cancer bunker crisis.

The $500m Australian Bragg Centre for Proton Therapy and Research, formerly “SAHMRI 2” was due to host the southern hemisphere’s first such unit in a specially designed, fortified, four-storey concrete basement.

But SA Health and Medical Research Institute’s world-leading cancer treatment collapsed in November last year after the state government sacked its US supplier, ProTom International.

As authorities scramble to find a new proton therapy supplier, taxpayers have secretly handed SAHMRI a new $12m bailout on top of its $5m annual government research funding that has been worth at least $80m since its 2009 launch.

Taxpayers shelled out more than $52m to the failed bunker project.

Treasurer Stephen Mullighan, who businessman Bruce Carter is advising, said the “loan facility” would help stabilise SAHMRI’s operations.

SAHMRI, which was founded in 2009, has denied it has traded insolvent or unable to pay debts.

Well-placed sources suggested “the big issue” for the institute was that many of its liabilities would fall due by the end of this financial year.

The institute, located in the West End’s $3.6 billion BioMed precinct, is already embroiled in a multimillion-dollar legal stoush with Australia’s biggest office landlord over Adelaide’s most expensive building.

Dexus Healthcare, which manages a $1.6bn fund for superannuation, public entities and SA investors is suing in the Supreme Court over alleged failings including breach of contract of an annual $17m lease worth $510m over a 30-year term.

Dexus, its publicly-listed property investment fund parent company with a $53bn portfolio, billed its $446.2m sale in October 2020 as one of Australia’s biggest.

In response to inquiries, Mr Mullighan – who has been advised on the Dexus court row – revealed the “state has continued to provide financial support to SAHMRI pending resolution of the various proton therapy project matters”.

“The government continues to support SAHMRI and ABCPTR as the organisations work through the challenges arising from ProTom International failing to meet its contractual commitments to deliver a proton therapy system,” he said.

“The government has recently provided a $12 million loan facility to SAHMRI.

“The loan facility provides capacity for SAHMRI to work through timing related matters with research grant programs, continue to build its donors/philanthropy base and ensure its operations are structured appropriately post the Covid period.

“This loan is in addition to the $5m per annum that the government has provided (it) since its inception to support its research endeavours.”

He said Mr Carter, the Whyalla Steel Taskforce and ASC chairman, has been assisting the government, through the Treasury Department since March last year.

He has “provided advice on a range of commercial matters arising from the failure of the proton therapy provider to SAHMRI, and acted as a liaison”.

He said the Treasury was continuing to work with the Commonwealth Government over “arrangements for an alternative proton therapy solution”.

A SAHMRI spokesman said the “additional financial assistance from the state (will) help progress proton therapy in South Australia”.

“We continue to work closely with the State and remain committed to delivering proton therapy for vulnerable cancer patients,” he said.

He said Mr Carter “has provided advice on steps to progress proton therapy for the state” while acting “as a liaison between SAHMRI, the state and third parties”.

Originally published as SAMRHI’s new multimillion-dollar taxpayer bailout revealed after Bragg Centre cancer bunker fiasco