Govt rejects VAMED claims, vows to fight int’l arbitration

– remains committed to completing both hospitals

The Government of Guyana on Thursday rejected allegations made by Austrian healthcare infrastructure firm VAMED Engineering GmbH over alleged unpaid sums and lapsed financing for two major hospital projects: the Guyana Pediatric and Maternity Hospital at Ogle, East Coast Demerara (ECD), and the New Amsterdam Hospital Campus in Berbice.
In light of this accusation, the company announced its intention to pursue international arbitration.

But both the Government and VAMED traded accusations of contractual breaches, financial mismanagement, and misleading narratives. However, the Government gave its commitment to citizens that it will not only fight the spurious claims by the company but that it remains committed to the projects it believes will help to boost healthcare here.
“VAMED has reached the regrettable but necessary decision to commence international arbitration proceedings against the Government of the Cooperative Republic of Guyana in relation to two major public healthcare infrastructure projects: The Guyana Pediatric and Maternity Hospital in Georgetown and the New Amsterdam Hospital Campus,” prominent attorney and politician Nigel Hughes, who represents VAMED, told a press conference the company hosted at the Marriott Hotel, Kingston, on Wednesday.
“This is not a step that VAMED has taken lightly. These projects are important projects. They were intended to deliver critical healthcare infrastructure for the people of Guyana, including specialised paediatric and maternity care and expanded hospital capacity in Region Six. VAMED remains fully conscious of its public importance. However, the dispute has reached a point where formal legal proceedings have become unavoidable. VAMED’s position is that substantial works have been performed, certified, and remain unpaid,” he added.
The Government, through the Health Ministry, described VAMED’s narrative as “misleading” and “incomplete”, asserting that the contractor’s performance deficiencies, delays, and noncompliance were the true causes of the current impasse.

Commitment
The Ministry emphasised that Guyana remains committed to completing both hospitals but insisted that every decision taken was guided by contractual obligations, accountability, and the prudent use of public funds.
While VAMED claims it has already carried out substantial work, including design services, site preparation, piling, structural construction, and mechanical engineering, the Government disputed this, arguing that payments are tied to verified progress and milestones that VAMED failed to meet.
“The Government categorically rejects the misleading narrative presented by VAMED, which omits critical facts regarding the contractor’s performance under these contracts and the reasons for the actions taken by the Ministry of Health,” the Government said in a statement through the Ministry of Health.
It highlighted that contrary to VAMED’s assertions, the issues affecting the projects cannot be reduced simply to a question of payments. “The contracts impose reciprocal obligations on both parties, significantly like any other contract: payments are commensurate with measured work completed and approved and the procurement of construction material and equipment. The Government has repeatedly documented concerns regarding delays in execution, failure to meet agreed milestones, inadequate mobilisation of resources, and the contractor’s inability to maintain the pace necessary for timely completion. These matters formed the basis of extensive contractual correspondence over many months,” it stated.
The Health Ministry, the Government explained, exercised its contractual rights only after providing VAMED with numerous opportunities to remedy these deficiencies.
“The Notices of Intention to Terminate were issued pursuant to the contractual provisions after careful consideration of the contractor’s performance and in accordance with the dispute resolution mechanisms established under the contracts,” the Government stated.
The Government also rejected the suggestion by VAMED that certified payment certificates automatically establish an undisputed indebtedness. “The amounts referenced by VAMED remain subject to the contractual valuation process, applicable contractual provisions, rights of set-off, certification procedures, and the resolution of multiple outstanding contractual issues. It is therefore inaccurate to characterise these figures as uncontested liabilities,” the Government said.

Expiration
With the facility backed by the UK Export Finance (UKEF) and funded by UniCredit Bank Austria AG, with the Government of Guyana as borrower, VAMED said that the loan agreement expired in November 2025, along with the export credit guarantee, as the firm argued that the Government failed to renew the financing despite repeated warnings.
“The loan expired in November 2025, and the export credit guarantee of the United Kingdom expired with it. And the question is, why did this happen? Why did the Government fail to renew the loan despite repeated communications from UniCredit and UKEF?” Hughes questioned.
The Government countered that financing arrangements cannot be divorced from project performance and stressed that this is the primary reason the project was pulled. “Financing arrangements are intrinsically linked to the progress and performance of the projects,” the Ministry said. “Any attempt to portray the financing issues in isolation from the contractor’s performance presents an incomplete and misleading account of the circumstances,” it added.
On June 2, 2026, the Health Ministry issued notices of intention to terminate both contracts. VAMED stated and described the move as unlawful. “The purported termination of the contract by the Government was wholly misconceived and in breach of the terms of the agreements,” the company declared. Further, it noted, “Any reduced project activity is a direct result of the Government’s failure to pay their certified outstanding indebtedness to VAMED.”
The Government insists the notices were justified. “The Ministry of Health exercised its contractual rights only after providing VAMED with numerous opportunities to remedy deficiencies,” the statement explained. “The Notices of Intention to Terminate were issued pursuant to the contractual provisions after careful consideration of the contractor’s performance.”

Blame
VAMED also blamed the Government for poor logistics, as the company claims that dozens of containers of project equipment remain uncleared at the port, incurring storage charges. “Since the cessation of payments, project equipment has accumulated at the port, with dozens of containers remaining uncleared and continuing to incur storage charges despite the Government’s obligation to facilitate the clearance process,” the company said.
The Government maintains that its actions have been consistent with contractual obligations and the protection of public resources.
VAMED said that the Government is adamant that it will not pay what the company claims is owned and it will commence arbitration before the ICC, seeking payment of outstanding sums, recovery of entitlements, interest, and protection against wrongful calls on bonds. “The Government cannot continue to benefit from certified works while failing to meet its own payment obligations.”
The Government is equally resolute, saying, “Should VAMED commence arbitration proceedings, the Government will vigorously defend its position before the appropriate tribunal” and that it is confident that the complete factual record… will demonstrate that its decisions were lawful, justified, and made in accordance with the contracts.”
The Government says that it remains steadfast in its commitment to delivering modern healthcare infrastructure for the people of Guyana, although the contractor failed to deliver, missed milestones, and now seeks to shift blame. “Every decision taken has been guided by the need to safeguard public resources, ensure accountability, and secure the timely completion of highquality healthcare facilities.”
The company’s attorney stressed that, “This is not simply a private disagreement between a contractor and an employee. It concerns certified nonpayment, lapsed sovereignbacked project financing, public infrastructure commitments, and the circumstances that have led VAMED to seek legal protection.”
On the other hand, the Government said that “Contrary to VAMED’s assertions, the issues affecting these projects cannot be reduced simply to a question of payments. The Government acted in good faith, honouring its contractual obligations while consistently engaging VAMED to address significant delays and deficiencies.”
The Government is confident that it will prove its actions were lawful and justified.