The Lure of Chinese Loans

China was the leading provider of external finance to Sri Lanka for infrastructure development during 2010-2016 accounting for 37% of the total. Sri Lanka borrowed USD 5,895 million from China for infrastructure development during this period. More than half of these loans from China (53%) came through a special regulatory framework set up in 2010, enabling the government to entertain unsolicited proposals (USPs) for public funded infrastructure projects circumventing the normal competitive procurement process. This research paper analyses the design and the actual practice of this special regulatory framework. The analysis aims to assess the extent to which the design and the actual execution of the special framework facilitated the realisation of its intended objectives.