Austrian engineering company going to arbitration for unpaid monies for stalled hospital projects; Health Ministry lists several failures including no completion plan

Last Updated on Thursday, 16 July 2026, 22:00 by Denis Chabrol

The Austria-headquartered health sector engineering company, VAMED Engineering GmbH, is preparing to take the Guyana government to arbitration to claim EUR45.3 million it says is overdue for “substantial works” on the construction of two hospitals, but government reacted sharply saying that the company has failed repeatedly to provide a plan for completing the two EUR299 million projects.

“We informed them that if they give us a plan to show us how they are completing these hospitals, then we would resume,” the official told Demerara Waves Online News.

The senior Guyana government official said all that has been done so far at the New Amsterdam Hospital campus in Berbice is the driving of piles, while almost 50 percent of the works at the paediatric and maternal hospital at Ogle, East Coast Demerara have been completed. The official said so far VAMED has not shipped and installed any biomedical equipment at the Ogle health care facility that is now one year overdue.

“We are not getting them to work and all they are doing is demanding payments and yes, we have some money for them but if you stopped working, why am I paying you?,” the official said, adding that all of the sub-contractors have been let go.

In an official reaction, the Ministry of Health said the dispute could not be reduced merely to the payment of outstanding monies, but must be linked to performance. The Health Ministry said there was a well-documented paper-trail outlining government’s grievances. “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,” the ministry said.

VAMED Engineering GmbH’s lawyer, Nigel Hughes declined to say whether a conservatory order or injunction would be sought from the arbitration panel when it is constituted to hear the dispute.

The company, in a separate statement, said it was demanding the EUR45.3 million in certified works including at least EUR19.5, and variations, indexation,, additional works and other contractual entitlements. He said the government’s engineer has separately estimated the administration’s indebtedness to VAMED at about EUR37.94 million. “These are not disputed or speculative claims. They arise from contractual mechanisms and interim payment certificates issued under the contracts themselves,” VAMED said.

However, the Health Ministry explained that 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 ministry added.

The company said despite repeated attempts to reach a commercially reasonable solution, VAMED has now gone almost one year without receiving any payment, the last having been made in May 2025. The company further stated that government issued notices of intention to terminate both contracts on June 2, 2026, saying that was in breach of the agreements. Already, the company indicated that it would not take any blame for delays in the projects, pointing out that “any reduced project activity is a direct result of the government’s failure to pay their certified outstanding indebtedness.” VAMED says it rejects any attempt to call performance bonds or guarantees while the government itself remains in substantial default of its payment obligations. As a result, the company said project equipment has accumulated at the port, with dozens of containers remaining uncleared and continuing to incur storage charges, though government is obliged to facilitate the clearance process. A source said no biomedical equipment was on the wharf but instead, there were steel structures for the New Amsterdam Hospital Complex contracted at a cost of EUR150 million.

Vowing to “vigorously defend” its position before an arbitration panel, the Health Ministry maintained that the evidence shows that it committed no breaches and its only interests are to safeguard public resources, ensure accountability, and secure the timely completion of high-quality healthcare facilities that meet the standards expected by the Guyanese people value. “The Government is confident that the complete factual record, including the extensive documentary evidence regarding the contractor’s performance, contractual compliance, and the actions taken by both parties, will demonstrate that its decisions were lawful, justified, and made in accordance with the contracts,” the ministry added.

While VAMED said the Guyana government failed to renew a loan from the United Kingdom Export Facility (UKEF) for the Ogle paediatric and maternity hospital project, the Health Ministry said allegations concerning export credit financing failed to acknowledge the contractual realities surrounding project implementation. The ministry said 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 health ministry added.