China, People's Republic of : Public–Private Partnerships Demonstration Program to Transform Delivery of Elderly Care Services in Yichang, Hubei

Health / Health insurance and subsidized health programs - Health system development

Public sector management / Decentralization

The PRC government seeks a sound mechanism for the provision of integrated, community- and home-based ECS that can be replicated nationwide. The program is aligned to the PRC''s 13th Five-Year Plan (2016-2020) which supports strengthening the ECS system in the PRC; and to government policies and priorities for introducing and expanding PPP in public services to bring efficiency, innovation, and quality that is affordable. Recent policy directives issued for the development of the ECS industry recognize the need to improve services and human resources; develop the ECS market; and outline responsibilities for local governments, and private and civil society stakeholders. The program is aligned with ADB's country partnership strategy (2016-2020) pillar on inclusive growth, the Midterm Review of Strategy 2020, the Operational Plan for Health (2015-2020), the PPP Operational Plan (2012-2020), and the Upper Middle Income Country Approach Paper. It also supports the programming priorities included in the Operational Directions for 2016.

The objectives of building local government capacity to apply appropriate laws and developing a demonstration ECS PPP requires the use of government systems within the national regulatory framework for PPPs, while providing incentives through results-based financing to support YMG to implement PPPs for ECS. To systematically build institutional capacity and create the best demonstration practice for application by other local governments, the program will (i) use national systems and PPP frameworks; (ii) focus on results and performance; (iii) take a risk-based approach; and (iv) be accompanied by appropriate capacity building to mitigate risk and ensure results. RBL is the appropriate approach to develop YMG's capacity to design, manage, and implement a true PPP in the ECS sector and to leverage ADB financing to introduce this innovative approach requiring a new way of working for local governments.

ADB''s value-addition is in introducing international expertise and good practice models; supporting an honest dialogue between potential bidders and the local government that ensures transparency and credibility to design a quality PPP project that offers genuine value for money; generates a high level policy dialogue with the government, and translates national PPP policies into an actionable PPP approach. Most importantly, local governments, including Yichang, are currently ill-prepared to take on transformational PPP projects without such external support. ADB's support is timely, will introduce innovation, contribute to knowledge on local level PPPs, and have a high demonstration impact. ADB has already gained credibility with the PRC government for responding to its PPP agenda with an appropriate mix of policy dialogue, sharing of international experience, and proposing an innovative service delivery approach. These efforts have placed ADB as a lead partner in the area of PPP and local government delivery of ECS.

The expected impact of the program is the expansion of socially inclusive high quality ECS using PPPs, which is aligned with:

(i) Three-tiered EC system (home, community, and institutional) established. (Opinions on Promoting the Development of Senior Care Service Industry (PRC State Council Circular No. 35, 2013 and the PRC 13th Five-Year Plan 20162020, which has development of elderly care as one of 10 key areas of industrial focus); and

(ii) Local government financing channels, using PPP and other means reformed and diversified (State Council, 2014. Opinions on Innovative Investment Mechanism and Encouraging Social Investment in Key Sectors. Beijing).

Quality ECS delivered by local governments using PPPs

Local government capacity to design, procure, manage, and deliver effective services through ECS PPPs developed

A socially inclusive PPP demonstration program for the ECS sector in Yichang successfully implemented

Output 1

Yichang Municipal Government has set up a special Program Promotion Office. The PPP TAS consultant was recruited in December 2019 and signed the consulting contract on 30 April 2020. The PPP TAS consultant-Deloitte has been fielded. Deloitte set up a coordination mechanism, and has initiated over 12 interviews with government entities, Kangyang, design institute and hospital in Yichang, etc., to discuss capacity building, project positioning, demand survey, public finance and available subsidies. Draft inception report has been submitted to PMO on 29 May. Deloitte has provided a detailed capacity building implementation plan and time schedule in the inception report. Due to the pandemic, TAS Consultant has provided first capacity building session in late June with topics incl. ECS industry-specific themes, PPP design, procurement, management and PPP policies and regulations. The PPP TAS consultant has provided two training sessions to the PMO to build capacity in PPP design, management, and effective service delivery to date.

The program implementing agency has obtained the state-owned construction land use right of two lots located in Jiawan Road, Xiling District and Yucai Road, Xiling District. Yichang City has provided the verification documents in accordance with the Verification Agreement on DLI proving that the said sites do not involve any liens and encumbrances. The preliminary design of the program has been approved by Yichang Municipal Development and Reform Commission on 13 November 2019 and passed the independent review of international design experts on 15 November 2019. In December 2019, the procurement of earth and stonework contract package was completed, and construction started on 18 December 2019. At present, the construction of temporary facilities has been completed.

Civil engineering contracts for two elderly care facilities have been awarded and construction is under way.

The report on the key performance indicators and monitoring system and the methodology used to identify the key performance indicators and formulate the monitoring methodology has been prepared. The PMO has recruited an individual specialist with elderly care and PPP expertise to verify the DLI by September 2022.

DLI 5 - Detailed feasibility report has been approved by ADB and is under revision by YMG.

Output 2

ADB conducted a PPP training to PMO in November 2018. Two EC facilities will be developed under the program: (i) comprehensive demonstration base for medical treatment and care on the former Gezhouba Tourism School site and (ii) demonstration base of community elderly care complex on the former Yichang Commercial School site. Civil engineering contracts for two elderly care facilities under the relevant index 2 have been awarded and construction is under way. The construction progress was delayed earlier this year by COVID-19 outbreak. The procurement plan of other supporting civil engineering and equipment is as follows: Elevator procurement was completed in the fourth quarter of 2021, the outdoor landscape project in the second quarter of 2022, the gas project in the third quarter of 2022, and the HVAC project will be purchased after the recruitment of the social capital party is completed and the scheme is determined. It is expected to complete the main construction of the community elderly care complex demonstration base in December 2022. It is expected to complete the main construction of the comprehensive medical care demonstration base in December 2023.