Gov’t ready to defend itself if VAMED commences arbitration proceedings

 See below full statement issued by the Ministry of Health:

The Government of Guyana has taken note of the press statement issued by VAMED Engineering GmbH regarding the Guyana Paediatric and Maternal Hospital and the New Amsterdam Hospital Campus.

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.

From the outset, the Government has remained fully committed to the successful completion of both hospitals, which are of strategic importance to the people of Guyana. At every stage, the Government acted in good faith, honouring its contractual obligations while consistently engaging VAMED to address significant delays, performance deficiencies, and contractual non-compliance based upon reports received from the two projects’ supervising engineers.

Contrary to VAMED’s assertions, the issues affecting these 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 works 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.

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 Government also rejects the suggestion 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.

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 of Health has consistently sought an amicable resolution throughout this process and has participated in discussions aimed at avoiding resort to termination and/or arbitration, with the hope that the projects would be completed to provide the intended valuable services to the people of Guyana, while protecting the interests of the people of Guyana and ensuring the prudent use of public funds.

Should VAMED commence arbitration proceedings, the Government will vigorously defend its position before the appropriate tribunal. 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 Government remains steadfast in its commitment to delivering modern healthcare infrastructure for the people of Guyana. Every decision taken has been guided by the need 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.

As this matter is now likely to proceed through formal dispute resolution, it would be inappropriate to comment further on issues that are properly reserved for determination by the arbitral tribunal.