Kathmandu. KATHMANDU: The RR International Hospital, which is under construction at Budhiganga of Morang with the investment of Shivam Group, is set to come into operation from next year.
The construction of the physical structure of the hospital including a six-storey building was started on December 19, 2080 BS and 40 percent progress has been made. Financial progress is 31 percent. The hospital operator is planning to bring it into operation from July 2026.
Infomerics Credit Rating Nepal has assigned ‘IRN B Plus’ to the long term loan facility and ‘A’ to the short term loan facility. Both ratings show that while the project carries high financial risk, the long-experienced promoter and strategic location show positive potential.
The hospital with 121 beds is estimated to be constructed at an estimated cost of Rs 2.45 billion. Out of this amount, only 25 percent will be invested by the promoters. The rest is dependent on bank credit facilities. The promoters have so far invested only 70 per cent of the committed capital. This situation indicates that the challenge of raising capital still remains, says Infomerics Nepal.
With an area of 5,756 square meters, the hospital will provide services like cardiology, surgery, gynecology, endoscopy, orthopedics, OPD and IPD services.
Patients from across the border are also expected to come for treatment as it is under construction near the bordering Bairgania.
As the hospital is in the construction phase, there is a risk of cost escalation due to the delay in construction. Since the physical progress is only 40 percent, if the work is not done on time, the date of start of the service may be affected. Apart from this, 75 percent of the project is dependent on loan capital, so the pressure to repay the loan will increase after the hospital service starts.
Although Biratnagar, the capital of Koshi Province, has a good population density, it may be challenging to compete with the old and big hospitals already run by the government and private sector in a limited market.
In addition, it may be financially difficult to manage cash flow in the initial years as it takes 3 to 5 years to raise the investment as the initial investment of the hospital is high.
While Shivam Group’s management and financial experience will strengthen its management capabilities, its ability to complete construction on time, raise debt capital, and maintain service stability will determine its future success.
