Sri Lanka has announced plans to start talks with Japan to revive a railway project that was scrapped in 2020.

A spokesperson said on Tuesday the Cabinet had approved the return to talks.

The project was to be funded by Tokyo, partially with yen loans, at an expected cost of around 1.5 billion dollars. A railway was to be built in Sri Lanka's largest city, Colombo, to help ease traffic congestion.

But it was unilaterally scrapped in 2020 by then President Gotabaya Rajapaksa.

Sri Lanka has been mired in deep economic crisis.
It is regarded as a typical example of a country that has received large infrastructure loans from China, in what is described as Beijing's "debt trap diplomacy."

Sri Lanka suspended external debt payments in April last year after its currency collapsed and prices skyrocketed.
Japan chaired a meeting several weeks ago with other creditor nations to help the country resolve its debt problems.

President Ranil Wickremesinghe visited Tokyo last week, meeting with Prime Minister Kishida Fumio. Wickremesinghe told NHK he aimed to conclude negotiations with creditors no later than October.

Discussions on the railway project are expected to take place once there has been progress on the debt challenge.