Austrian company to begin int’l arbitration over unpaid hospital contracts

Jul 17, 2026 News

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…Govt. rejects “misleading narrative,” vows to defend itself

(Kaieteur News) – VAMED Engineering GmbH, a Vienna-based international healthcare infrastructure provider, announced Thursday that it will pursue international arbitration against the Government of Guyana over unpaid, certified costs on two major hospital construction projects — a claim the government has firmly rejected, calling VAMED’s account a “misleading narrative” that omits critical facts about the contractor’s own performance.

VAMED says it is owed approximately EUR 45.53 million, including at least EUR 19.15 million in certified payments plus variations, indexation, additional works, and other contractual entitlements. The government’s own engineer has reportedly estimated Guyana’s indebtedness to VAMED at approximately EUR 37.94 million.

The claims stem from two Design-and-Build Contracts between the Ministry of Health and VAMED: a EUR 149 million agreement dated 8^th June, 2022 to build the Guyana Pediatric and Maternal Hospital in Georgetown, and a EUR 150 million agreement dated 12^th July, 2023 for the New Amsterdam Hospital Campus in Region Six. Together, the projects were intended to deliver specialised maternal and pediatric care in Georgetown and expand access to quality healthcare in Region Six.

VAMED’s account

VAMED’s attorney, Nigel Hughes, outlined the company’s position alongside its Institutional Representative, Dr. Joao Pedro da Silva, at a press conference at the Guyana Marriott Hotel. According to Hughes, the dispute traces back to the collapse of the financing framework underpinning the Georgetown hospital project. That project was financed through an Export Credit Facility backed by UK Export Finance and funded by UniCredit Bank Austria AG, with the Government of Guyana as borrower.

The loan agreement, and the export credit guarantee tied to it, expired in November 2025 after the government failed to renew or extend the arrangement — despite repeated communications from both UniCredit and UK Export Finance warning of the impending expiration.

“Why would a government allow a critical export credit facility supporting one of its most important healthcare infrastructure projects to expire, thereby removing a key payment security mechanism for the contractor and jeopardising the completion of the project itself?” Hughes asked.

Hughes said VAMED has gone almost a year without payment, with the last payment made in May 2025. He argued the claims are not in dispute or speculative, noting they arise directly from contractual mechanisms and Interim Payment Certificates issued under the agreements themselves.

The dispute escalated further when the government issued notices of intention to terminate both contracts on 2^nd June, 2026 despite what VAMED describes as substantial certified indebtedness owed to the company. Hughes called the termination attempt “wholly misconceived and in breach of the terms of the agreements,” adding that any reduction in project activity stems directly from the government’s failure to pay outstanding certified sums. VAMED also says it rejects any attempt to call performance bonds or guarantees while the government remains in default of its own payment obligations.

The standoff has had practical consequences on the ground: project equipment has piled up at the port since payments stopped, with dozens of containers left uncleared and accumulating storage charges, despite the government’s obligation to facilitate clearance.

Having exhausted efforts at a negotiated resolution, VAMED said it will proceed with formal arbitration before the International Chamber of Commerce. The company is seeking payment of all outstanding certified sums, recovery of additional contractual entitlements, interest on overdue amounts, protection against wrongful bond and guarantee calls, and damages arising from any unlawful termination.

“VAMED did not choose arbitration lightly,” a company spokesperson said, adding that months of seeking a “responsible and commercially reasonable solution” had failed to resolve a situation in which the government continued to benefit from certified works while allowing financing to lapse, ignoring lender communications, and threatening termination and bond calls against a contractor already absorbing unpaid project costs.

“VAMED cannot continue to finance the obligations of the Government of Guyana,” the spokesperson said.

The company maintains the arbitration is not an act of confrontation but a necessary step to restore a viable payment and financing framework, protect employees, suppliers, and financing partners, and enable the orderly completion of the projects. VAMED said it deeply regrets that the deterioration of the contractual relationship now puts at risk the timely delivery of healthcare infrastructure — and, ultimately, healthcare services — for the Guyanese population.

Government’s response

The Government of Guyana has pushed back against VAMED’s statement, rejecting what it called a “misleading narrative” that omits critical facts about the contractor’s performance and the reasons behind the Ministry of Health’s actions.

The government said it has remained fully committed to completing both hospitals from the outset, given their strategic importance to the country. It maintains it acted in good faith throughout, honouring its contractual obligations while repeatedly engaging VAMED to address delays, performance deficiencies, and contractual non-compliance flagged in reports from the projects’ supervising engineers.

The government argues the dispute cannot be reduced to a question of payments alone. Like any contract, it said, the agreements impose reciprocal obligations on both parties, with payments tied to measured, approved works and the procurement of construction materials and equipment. Officials say they repeatedly documented concerns over execution delays, missed milestones, inadequate mobilisation of resources, and VAMED’s inability to sustain the pace needed for timely completion — issues that formed the basis of extensive contractual correspondence over many months.

“The Ministry of Health 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 statement said.

The government also disputed the idea that certified payment certificates automatically establish undisputed debt. It said the amounts VAMED has referenced remain subject to the contractual valuation process, applicable provisions, rights of set-off, certification procedures, and the resolution of multiple outstanding contractual issues, making it inaccurate to characterise the figures as uncontested liabilities.

Similarly, allegations concerning export credit financing fail to acknowledge the contractual realities surrounding project implementation. Financing arrangements are intrinsically linked to the progress and performance of the projects. Any attempt to portray the financing issues in isolation from the contractor’s performance presents an incomplete and misleading account of the circumstances,” the ministry said.

The Ministry of Health said it has consistently sought an amicable resolution and participated in discussions aimed at avoiding termination or arbitration, in the hope the projects could be completed for the benefit of the Guyanese people while ensuring the prudent use of public funds. Should VAMED proceed with arbitration, the government said it will vigorously defend its position before the tribunal, expressing confidence that the full factual record — including documentary evidence on the contractor’s performance and contractual compliance — will show its decisions were lawful, justified, and consistent with the contracts.

The government reiterated its commitment to delivering modern healthcare infrastructure for Guyanese, saying every decision taken has been guided by the need to safeguard public resources, ensure accountability, and secure the timely completion of quality healthcare facilities. With the matter now likely headed to formal dispute resolution, the government said it would be inappropriate to comment further on issues reserved for determination by the arbitral tribunal.

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• healthcare infrastructure, unpaid hospital contracts, VAMED, VAMED Engineering GmbH

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