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The Southern District Health Board will fund a $6 million replacement linear accelerator itself this year, if it gets Government approval.
Chief executive Brian Rousseau said the $6 million would cover both the machine and the bunker for it and would replace one of the board's three existing accelerators which was 17 years old and only able to work at about half capacity.
The new purchase should increase the throughput of cancer patients.
The board is awaiting approval from the National Health Board and Health Minister Tony Ryall for the purchase.
Because of its multimillion-dollar deficit, the board is required to get such approvals for any projects over $1 million.
Before reaching this stage, however, the board has had to establish to the satisfaction of its South Island counterparts on the regional capital committee that the replacement is necessary and the service could not be provided elsewhere.
The ageing machine will be taken out of service when the new one is installed and Mr Rousseau was hopeful that if approval was quickly forthcoming the new unit would be "up and running" this year.
The board has also recently received $1.8 million government funding to upgrade the software on the existing machines, work which was being carried out now, Mr Rousseau said.
The purchase of the new machine would have been necessary regardless of the recent change in the national target for cancer treatment time, he said.
This year, the target was tightened to reduce the maximum wait for cancer patients starting radiation therapy following a specialist's referral from six weeks to four weeks.
A linear accelerator is used for radiation treatment for patients with cancer.
It is also used for radiosurgery where an intense beam of radiation into the brain is used to treat malignant tumours, blood vessel abnormalities and acoustic neuromas.
Dunedin is the only South Island centre providing radiosurgery.