Cabinet spokesman Bandula Gunawardena said that the project has been suspended to be reviewed and renegotiated.
He said that it was found that the project had been negotiated by the former Government for a high cost.
The Minister said that the current administration is looking at cutting costs and taking forward projects more productive for the public.
He said that the Road Development Authority will brief the media next week on the future plans of the project.
In March last year the Japan International Cooperation Agency (JICA) signed a loan agreement with the Government of Sri Lanka to provide a Japanese ODA loan of up to 30.04 billion yen for the Project for the Establishment of Light Rail Transit System in Colombo.
The objective of the project was to boost the transportation capacity and improve the safety and comfort of public transportation by introducing a light rail transit (LRT) system with 16 stations distributed over 15.7 kilometers of track in and around Colombo.
By doing so, the project sought to improve the urban environment through a reduction in air pollution and other traffic pollution and to stimulate socioeconomic activities in the area. (Colombo Gazette)