The Government of Sri Lanka has cancelled the development of a Light Rail Transit (LRT) network in western Colombo. The government stated that the project would destroy many household and business premises along with important wetlands. The construction and operational cost for the elevated railway track would also be much higher. Instead of LRT network, the government is now seeking urban transportation options which are cost-effective and will provide solutions to transportation problems in Colombo.

The government is considering to spend US$ 500 million for innovative urban transportation solutions. With the project shelved the government also cancelled the concessionary loan agreement signed with Japan International Cooperation Agency to provide investment up to 30.04 billion yen (US$ 0.27 billion).

In 2016, MMWD prepared a comprehensive Transport Master Plan which aimed, in part, at developing solutions for improving the public transport network of the Western Region of Colombo, a fast-growing area surrounding Colombo.  An LRT network comprising three lines totalling about 84 km is envisaged as a major component of this transport improvement initiative. This LRT network will connect several key areas of the Western Region with the heart of the capital city of Colombo. The Government intends to implement the LRT project as a PPP using a Build-Own-Operate-Transfer (BOOT) project delivery model.

CPCS will support the Ministry to successfully implement the PPP procurement process. This includes advising on the bidding process through to proposal submission, evaluation of proposals, negotiations with preferred bidder(s) and execution of the PPP agreements to implement this LRT project.