The FINANCIAL -- The Asian Development Bank (ADB) 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).
“In Yichang City, 20% of its residents are more than 60 years of age, which is among the highest in the country whose national average is 14%. Yet, elderly care facilities and services available there remain inadequate,” said Sofia Shakil, ADB’s project team leader. “The ADB program will help Yichang City pilot delivery of integrated residential, community, and home-based elderly care services in partnership with the private sector. The program will develop Yichang City’s capacity to design and implement PPP contracts and attract private care providers who will enter into concession agreements with the municipal government to deliver innovative, elderly-friendly, and quality services.”
Demand for expanded and effective elderly care services has been increasing in the PRC where the proportion of people above 60 is expected to grow from 14% in 2016 to 34% by 2050, especially for elderly women, disabled, widowed, and those without family members attending to them. In Yichang, all of the elderly care service facilities have relatively poor standards, with many ill-equipped in terms of staff and basic care, according to ADB.
The PRC has been successful in implementing PPP projects over the last decades, particularly in infrastructure, which has improved efficiency, availability of capital, and quality of service delivery. But the same cannot be said of PPP projects for the delivery of social services due to lack of expertise in local governments in understanding the intricacies of PPPs, including the design, procurement, and contract management.
The ADB assistance will be part of the Yichang Long-Term Care Services Plan and develop the capacity of the Yichang municipal government to design, procure, manage, and deliver effective services through private elderly care service providers. An appropriate mix of capacity building actions with results-based disbursements will support Yichang to implement well-designed and transparently bid elderly care service PPPs.
The ADB assistance will be the first sovereign results-based loan for the promotion of PPPs in the PRC that could provide a model and demonstration for other local governments in using PPPs for the delivery of efficient and effective public social services.
The total cost of the project is $128.4 million, with the Yichang municipal government contributing $55 million and the private sector expected to contribute a further $23.4 million. The expected ADB project completion date is by the end of 2022, with the PPP contracts expected to operate for 25 years.