HGP Nightly News – The Government says it is prepared to fight VAMED Engineering in arbitration over the Guyana Paediatric and Maternal Hospital and New Amsterdam Hospital Campus, accusing the company of failing to meet construction deadlines and other contractual obligations.
In a strongly worded response to a statement from VAMED, the Government rejected the contractor’s account of the dispute as misleading and incomplete.
VAMED has reportedly raised concerns about unpaid certified payment certificates and export-credit financing. The Government countered that the problems affecting the projects cannot be reduced to payment alone.
It alleged that VAMED repeatedly failed to meet agreed milestones, mobilise adequate resources and maintain the pace required for timely completion.
Those allegations have not yet been tested before an arbitral tribunal.
According to the Government, payments under the contracts are tied to work that has been measured, completed and approved, along with the procurement of construction material and equipment.
The Ministry of Health said supervising engineers had reported significant delays, performance deficiencies and contractual non-compliance. Those concerns were raised with VAMED repeatedly over several months, it added.
The ministry said it issued notices of intention to terminate only after giving the contractor several opportunities to correct the alleged deficiencies.
It maintained that the notices were issued under the contracts and in keeping with their established dispute-resolution procedures.
The Government also rejected VAMED’s reported position that certified payment certificates establish an undisputed debt.
According to the ministry, the amounts remain subject to contractual valuation, certification procedures, possible set-offs and the resolution of other outstanding issues. It therefore disputes any suggestion that the sums claimed by VAMED are uncontested liabilities.
The disagreement over payment appears likely to become one of the central questions in arbitration: whether Guyana withheld sums that were properly certified and payable, or whether the Government was entitled to retain or set off those amounts because of alleged delays and breaches.
Export-credit financing has also emerged as a point of contention.
The Government argued that the financing arrangements cannot be separated from the pace and performance of construction. VAMED’s reported account failed to acknowledge that connection, the ministry claimed.
The Paediatric and Maternal Hospital at Goedverwagting on the East Coast Demerara is a G$31.9 billion project financed with support from UK Export Finance. The financing agreement provided approximately €161 million for the specialised hospital, which VAMED was contracted to build.
The project was previously expected to be completed in the final quarter of 2025, but that deadline passed. Health Minister Dr Frank Anthony said in May that changes in VAMED’s ownership had contributed to delays.
The New Amsterdam Hospital Campus is a separate investment valued by the Ministry of Health at US$161 million. The proposed Level Five facility is expected to contain 75 inpatient beds and serve more than 250,000 residents in Region Six and surrounding areas.
The Government advanced approximately G$3.3 billion to VAMED in 2023, representing 10 per cent of the New Amsterdam contract price.
With both projects considered central to the Government’s healthcare expansion, termination would create its own difficulties. Replacing a major international contractor could add further delays, require the reassessment of completed work and complicate existing financing and supply arrangements.
The Ministry of Health said it had participated in discussions aimed at reaching an amicable settlement and avoiding termination or arbitration. Those efforts were intended to keep construction moving while protecting public money, it said.
Should VAMED begin arbitration, the Government said it would “vigorously defend” its decisions.
It expressed confidence that correspondence, engineering reports and other project records would show that its actions were lawful and justified under the contracts.
The Government has declined to comment further, saying the dispute is now likely to move into formal proceedings.
The competing claims leave the future of both hospitals uncertain. The legal fight may determine who breached the contracts, but the more immediate public question is who will complete the facilities and how much longer patients will have to wait.
