I've run into this situation many times in the field. A large piece of production machinery that has a bearing worn to the point it can no longer function properly. The first task at hand would be to either find a print showing the exact location, or in the case where no print is available find an identical piece, which in your case would be the opposite end of the machine. Measure the undamaged piece from known identical surfaces to find the center of the hole. Then make a fixture that can either be clamped, bolted, or tack welded to the damaged section with an oversize size hole in the proper location. Once the fixture is in place you can use a mag drill with the appropriate size cutter (drill, hole saw, etc.) Align the cutter to make a new hole that will be larger in diameter than the damaged area.
Once you have a large enough hole you can make a bushing with a matching OD and proper ID to fit the shaft. Press it in the existing piece and weld it in place if possible. If space allows you might be able to bolt a flange bearing to the existing damaged piece. In this case however It appears boring and fabricating a bushing would be the most logical choice.