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"The Colombo metropolitan region produces almost 60 percent of gross domestic product and 80 percent of industrial output," Rosanna Nitti, senior urban specialist at Sri Lanka's World Bank office said.
"Sri Lanka needs to tap the competitive advantages of the Colombo metropolitan region to spearhead and accelerate growth."
Dense urban cities which have strong external links have been the key to exponential growth especially in Asia.
The 223 million US dollar project which officially kicked on last July ties in with Sri Lanka governments other plans to modernize the city including the outer circular project funded by other donors.
Colombo was severely flooded in 2010 with activities in most areas coming to a standstill but even short spurts of intense rainfall can flood roadways as the cities ageing storm water drains overflow.
Additional secretary of Sri Lanka's defence and urban development ministry Rohan Seneviratne said key bottlenecks in 45 places where storm water drains flood will be fixed in addition to improving canals and locks dating back to the Dutch period.
Several areas in the city will be spruced up, road widened to improve traffic flow.
Local authorities (municipalities) in Colombo, Kotte, Dehiwela-Mt Lavinia and Kolonnawa areas will get equipment and training to keep the city clean and maintain the infrastructure that will be build by the project.
Several lakes will be dug up, lakefront walking streets, entertainment areas and a beachfront promenade, modern public toilets and overhead pedestrian bridges will be built.
Seneviratne said the project is one of the fastest executed World Bank projects in the country with several contracts such as the modernisation of Colombo's iconic city hall already being awarded.
"The contracts were awarded under open bidding keeping to guidelines of the government and the World Bank," he said.
"The World Bank has strict guidelines and we welcome them."
A rapidly degrading tiny wetland area in Baddegana in Kotte which is home to many species of birds including two large resident populations of whistling teal and purple coot as well as migrants such as golden plovers and sandpipers is also to be conserved.
When questioned by reporters officials said a wetland including rich in reed beds which is prime bird habitat in front of Sri Lanka's environmental authority that is currently being dug up into a featureless water body is not part of the World Bank funded project.
Nitti said the flood reduction program is being designed to cope with higher levels of rainfall after analyzing 25 years of data. Officials were also taking into account an increasing trend towards shorter and more intense monsoon rains.
Seneviratne said a French consultancy firm has just concluded an aerial hydrological survey of Colombo of the area which had provided valuable insights.
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