China, People's Republic of: Public–Private Partnerships Demonstration Program to Transform Delivery of Elderly Care Services in Yichang, Hubei
The proposed Asian Development Bank (ADB) assistance will be the first sovereign public-private partnerships (PPP)-related loan in the People's Republic of China (PRC) that can potentially transform the delivery of social services by local governments. The PPP Demonstration Program (the program) will build capacity for developing, procuring, and managing transparent PPPs and finance a demonstration PPP for socially inclusive, efficient, and quality elderly care services (ECS) in one municipality (Yichang, Hubei). The program will serve as a demonstration for other local governments, and create more opportunities for ADB to finance inclusive and efficient service delivery in the PRC.
East Asia Department
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China, People's Republic of
|Project Name||Public–Private Partnerships Demonstration Program to Transform Delivery of Elderly Care Services in Yichang, Hubei|
|Country / Economy||China, People's Republic of
|Project Type / Modality of Assistance||Loan
|Source of Funding / Amount||
|Strategic Agendas||Inclusive economic growth
|Drivers of Change||Gender Equity and Mainstreaming
Governance and capacity development
Private sector development
|Sector / Subsector||
Health / Health insurance and subsidized health programs - Health system development
Public sector management / Decentralization
|Gender Equity and Mainstreaming||Some gender elements|
|Description||The proposed Asian Development Bank (ADB) assistance will be the first sovereign public-private partnerships (PPP)-related loan in the People's Republic of China (PRC) that can potentially transform the delivery of social services by local governments. The PPP Demonstration Program (the program) will build capacity for developing, procuring, and managing transparent PPPs and finance a demonstration PPP for socially inclusive, efficient, and quality elderly care services (ECS) in one municipality (Yichang, Hubei). The program will serve as a demonstration for other local governments, and create more opportunities for ADB to finance inclusive and efficient service delivery in the PRC.|
|Project Rationale and Linkage to Country/Regional Strategy||
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).
|Description of Outcome||
Quality ECS delivered by local governments using PPPs
|Progress Toward Outcome||A review mission was fielded on 31 March to 6 April 2022. The progress is about 2 years behind the original implementation schedule. The delay is caused mainly by (i) prolonged preparation and approval of the feasibility study report resulting from the special PPP and results-based lending features of the program, (ii) loan effectiveness 18 months after loan approval, (iii) frequent staff changes in the executing and implementing agencies and the ADB project team leader at the start-up stage, (iv) delay in PPP TAS consultant recruitment, (v) COVID-19 pandemic, and recently (vi) unsatisfactory deliverables by the PPP TAS consultants. It is crucial to accelerate the PPP TAS to enable midterm review in Q4 2022, so that loan extension and other changes in implementation arrangement can by processed in time for the original loan closing date of 30 June 2023.|
|Description of Project Outputs||
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
|Status of Implementation Progress (Outputs, Activities, and Issues)||
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.
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.
|Summary of Environmental and Social Aspects|
|Environmental Aspects||All environmental assessments for the selected sites are to follow the domestic Environmental Impact Table procedure and specific requirements documented in the PSSA.YHIDC will ensure that all construction and rehabilitation activities are undertaken in accordance with the requirements of the detailed actions defined in the ESSA and PSSA. In particular, they will (i) assign qualified personnel to coordinate the implementation of the environmental action plan; (ii) establish and coordinate an inspection, monitoring, and information disclosure mechanism for program environmental safeguards; and set up a locally accessible grievance redress mechanism with access and procedural information disseminated on the YMG website and at construction sites; and (iii) ensure environment safeguard contract clauses are inserted in all construction contracts and provide contractors with copies of the relevant environmental actions as part of the contract details.|
|Involuntary Resettlement||The program''s involuntary resettlement impacts are confirmed as C. The program will not acquire any land from nor affect income and livelihood sources or access to natural and common property resources and common property from any person or community. In fact, it will provide employment for both skilled and unskilled workers at construction sites, and later at ECS facilities.|
|Indigenous Peoples||The impact of the program on ethnic minorities in Yichang is limited yet positive, as ethnic minority elderly will have equal access to ECS the program provides. Dietary requirements and cultural and recreational activities that cater for ethnic minority needs will be provided. The ADB's indigenous peoples safeguard policy requirements are not triggered, and the impacts on indigenous peoples are confirmed as B.|
|Stakeholder Communication, Participation, and Consultation|
|During Project Design||During the project preparatory technical assistance, more than 170 people were interviewed through 20 focus group discussions and 16 in-depth interviews. In addition, a number of key informant interviews and stakeholder workshops were held with the relevant bureaus of the YMG (e.g., Civil Affairs Bureau, Development and Reform Commission, Financial Bureau) and ECS providers.|
|During Project Implementation||A further detailed analysis of care needs will be conducted, and further consultations with elderly people will be held.|
|Consulting Services||The RBL program implementation will use the country's program procurement systems. Yichang project management office will undertake the procurement of civil works, goods, and services.|
|Procurement||The RBL program implementation will use the country's program procurement systems. Yichang project management office will undertake the recruitment of consulting services.|
|Responsible ADB Officer||Bai, Jie|
|Responsible ADB Department||East Asia Department|
|Responsible ADB Division||Urban and Social Sectors Division, EARD|
Yichang Municipal Government
|Concept Clearance||30 Jun 2016|
|Fact Finding||16 Aug 2016 to 19 Aug 2016|
|MRM||27 Sep 2016|
|Approval||12 Dec 2016|
|Last Review Mission||-|
|Last PDS Update||29 Sep 2022|
|Approval||Signing Date||Effectivity Date||Closing|
|12 Dec 2016||11 Mar 2018||20 Jun 2018||30 Jun 2023||-||-|
|Financing Plan||Loan Utilization|
|Total (Amount in US$ million)||Date||ADB||Others||Net Percentage|
|Project Cost||105.00||Cumulative Contract Awards|
|ADB||50.00||25 Oct 2022||16.17||0.00||32%|
|Cofinancing||0.00||25 Oct 2022||27.67||0.00||55%|
|Status of Covenants|
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ADB Helps Yichang City, PRC, to Deliver Elderly Care Services with Private SectorADB has approved a $50 million loan to pilot delivery of elderly care services through public-private partnerships (PPPs) in Yichang City, Hubei Province, in the People’s Republic of China (PRC).
|Tender Title||Type||Status||Posting Date||Deadline|
|Public–Private Partnerships Demonstration Program to Transform Delivery of Elderly Care Services in Yichang, Hubei||Individual - Consulting||Closed||08 Apr 2022||14 Apr 2022|
|Public–Private Partnerships Demonstration Program to Transform Delivery of Elderly Care Services in Yichang, Hubei||Individual - Consulting||Closed||24 Mar 2022||04 Apr 2022|
|Individual - Consulting||Closed||17 Feb 2022||23 Feb 2022|
|PPP Transaction Advisory Services||Firm - Consulting||Closed||21 May 2019||19 Jun 2019|
|Program Management Support||Firm - Consulting||Closed||21 May 2019||19 Jun 2019|
|Individual - Consulting||Closed||30 Jan 2019||16 Feb 2019|
|Contract Title||Approval Number||Contract Date||Contractor | Address||Executing Agency||Total Contract Amount (US$)||Contract Amount Financed by ADB (US$)|
|WA ON THE DISBURSEMENT LINKED INDICATORS FOR DLI2 FOR 2020||Loan 3506||29 Nov 2020||PRC | PRC CHINA,PEOPLE'SREP.OF||Yichang Municipal Government||6,000,000.00||6,000,000.00|
|WA ON THE DISBURSEMENT LINKED INDICATORS FOR PRIOR RESULTS||Loan 3506||17 Dec 2018||DLI 2 | HUBEI CHINA,PEOPLE'SREP.OF||Yichang Municipal Government||3,000,000.00||3,000,000.00|
None currently available.