The Government of Guyana has forcefully rejected allegations by Austrian contractor VAMED Engineering GmbH that it defaulted on payment obligations and allowed financing for two major public hospital projects to collapse, insisting the contractor’s own performance failures—not Government action—triggered the dispute now headed for international arbitration.
In a statement issued last Thursday after VAMED announced its intention to commence proceedings before the International Chamber of Commerce (ICC), the Government described the company’s account as a “misleading narrative” that omits “critical facts regarding the contractor’s performance under these contracts and the reasons for the actions taken by the Ministry of Health.“
At issue are the €149 million Guyana Paediatric and Maternal Hospital in Georgetown and the €150 million New Amsterdam Hospital Campus, projects widely regarded as cornerstones of the Government’s healthcare modernisation programme.
The Government maintained that it has remained “fully committed to the successful completion of both hospitals” and said every decision taken was guided by the need to protect public funds while ensuring the projects met contractual standards.
According to the Government, VAMED’s claims cannot be reduced to a simple question of unpaid invoices.
“The contracts impose reciprocal obligations on both parties,” it said, explaining that payments are tied to measured works completed, approved and supported by the procurement of construction materials and equipment.
The Government said the Ministry of Health had repeatedly documented “significant delays, performance deficiencies, and contractual non-compliance“ by VAMED, including missed milestones, inadequate mobilisation of resources and failure to maintain the pace necessary for timely completion.
Those deficiencies, it said, formed the basis of months of correspondence between the parties and ultimately led to the issuance of Notices of Intention to Terminate both contracts on June 2, 2026.
The Government also challenged one of the central pillars of VAMED’s case—that certified payment certificates establish undisputed debts.
“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,” the statement said.
“It is therefore inaccurate to characterise these figures as uncontested liabilities.”
The Government similarly rejected VAMED’s assertions that it allowed the export credit financing for the Georgetown hospital to lapse through neglect.
According to the administration, the financing arrangements “are intrinsically linked to the progress and performance of the projects,” arguing that VAMED’s attempt to isolate financing issues from its contractual performance presents “an incomplete and misleading account of the circumstances.”
The Government said it had consistently sought an amicable resolution and engaged in discussions aimed at avoiding termination and arbitration while protecting the interests of the Guyanese people.
Should arbitration proceed, it said it will “vigorously defend its position”, expressing confidence that the documentary evidence will demonstrate its decisions were “lawful, justified, and made in accordance with the contracts.”
Earlier Thursday, VAMED, through its attorney C.A. Nigel Hughes, announced that it had decided to commence arbitration after nearly a year of unsuccessful attempts to resolve the dispute.
Hughes said the company had “not taken this step lightly,” arguing that VAMED had completed substantial work on both hospitals but had received no payment since May 2025.
“The Government’s own appointed Engineer has certified amounts due to works already carried out. Despite that, those certified sums have not been paid,” Hughes said.
VAMED claims it is owed €45.53 million, including at least €19.15 million in certified payments, and contends that the Government’s supervising engineer has separately estimated the State’s indebtedness at approximately €37.94 million.
The contractor also accused the Government of failing to renew a UniCredit Bank Austria AG loan backed by United Kingdom Export Finance (UKEF) before it expired in November 2025, alleging that the lapse removed a critical payment guarantee underpinning the Georgetown hospital project.
In addition, VAMED alleged that dozens of containers containing project equipment remain uncleared at the wharf while accumulating storage charges, and argued that the Government’s notices of intention to terminate the contracts were issued despite its own alleged payment defaults.
“VAMED did not choose arbitration lightly,” the company stated. “The Government cannot continue to benefit from certified works while failing to meet its own payment obligations… VAMED cannot continue to finance the obligations of the Government of Guyana.”
With both sides now firmly entrenched, the future of nearly €300 million in public healthcare infrastructure—and the completion of two hospitals expected to transform medical services in Georgetown and Region Six—will be decided before an international arbitral tribunal.
