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The Government of Sri Lanka requested the Asian Development Bank (ADB) to help develop a master plan for the country's railway sector. The railway system in Sri Lanka is a critical part of the transport infrastructure, which is heavily road-based, with 93% of land transport reliant on roads. The government's strategy is to improve public transport and railway services, meeting the demand for both passenger and freight services. PADECO was contracted by ADB to assess current railway operations and infrastructure, as well as to create a development framework for the sector.

PADECO prepared a strategic railway development plan for 2020 to 2040, including areas such as freight, passenger services, and institutional improvements. Key components of the plan included reviewing Sri Lanka Railway's organizational structure and financial performance, and proposing measures for operational and financial efficiency. The plan also included assessments of infrastructure, rolling stock, and maintenance requirements to meet future demand. Additionally, the plan addressed multimodal connectivity, tariff structures, and intermodal efficiency improvements. PADECO conducted a comprehensive traffic forecast and demand analysis, including surveys to assess future railway needs. The development of a land use and management plan for railway assets was also included in the framework. A five-year business plan focused on short-term reforms and investments to modernize Sri Lanka Railways, preparing for the implementation of the long-term master plan.