The government has moved to protect its investment in two major health infrastructure projects following the termination of contracts with VAMED Engineering GmbH for the construction of the New Amsterdam Hospital Campus in Region Six and the Guyana Paediatric and Maternal Hospital at Ogle.
This was according to Attorney General and Minister of Legal Affairs, Mohabir Anil Nandlall, S.C on his weekly Facebook podcast “Issues in the News”.
The contracts were terminated on July 23, 2026, following what the government described as persistent delays, contractual breaches and failures by the contractor to bring the projects back on schedule despite repeated engagements and opportunities to address the deficiencies.
The AG said the government had made repeated efforts to resolve the difficulties with the contractor before ultimately exercising its contractual rights.
“Government was forced to terminate both contracts,” the Attorney General said, explaining that, at the time of termination, the works were significantly behind the level of completion required under the contracts.
The termination has triggered a series of contractual and legal measures.
The government immediately moved to secure both hospital sites and the materials located there, while also taking steps to invoke the performance security associated with the contracts.
Each contract was backed by a performance bond valued at approximately €15 million, providing an important financial safeguard for the State.
The AG said the government has initiated the process to call in the outstanding sums under the bonds which were issued by the Bank of Austria.
The contractual dispute is now moving through the arbitration process. Both agreements contain arbitration clauses requiring disputes to be referred to the International Chamber of Commerce (ICC).
The government has initiated arbitration proceedings in accordance with those provisions, while maintaining that the contractual dispute should be resolved through the agreed international arbitration mechanism.
The AG said the Government has also appealed aspects of the High Court’s orders concerning control of the sites and materials pending the establishment of the arbitration tribunal.
Importantly, the government has stressed that the termination of the contracts does not represent an abandonment of the two hospital projects. Rather, the position is that the State is taking the necessary legal and contractual steps to protect public assets and ensure that these major healthcare investments can ultimately be completed.
Minister Nandlall has also pointed to the location of the arbitration proceedings as an important development for Guyana’s legal and commercial environment. Although the ICC is headquartered in Paris, the seat of these arbitrations will be Guyana, allowing the proceedings to be conducted locally.
He said this reflects Guyana’s broader ambition to establish itself as an international arbitration destination, supported by the country’s modern arbitration legislation and its adoption of internationally recognised arbitration standards.
The government’s broader objective remains the expansion and modernisation of the national health system, with major investments being made to improve access to specialised-quality healthcare across the country. [DPI]
Discover more from INews Guyana
Subscribe to get the latest posts sent to your email.
