> ## Content Index > Fetch the complete content index at: https://www.jaffnamonitor.com/llms.txt > Use this file to discover other available public pages before exploring further. # Budget Skips Palaly Airport and Kankesanthurai Port, Pledges to Resettle 13,000 War-Displaced Families - URL: https://www.jaffnamonitor.com/featured/budget-skips-palaly-airport-and-kankesanthurai-port-pledges-to-resettle-13-000-war-displaced-families/ - Published: 2026-11-12T15:54:47.000Z - Updated: 2026-11-12T15:54:47.000Z - Author: Jaffna Monitor - Tags: JM Exclusive, November 2026 **By Jaffna Monitor Staff** **Colombo, 12 November 2026** The 2027 budget that President Anura Kumara Dissanayake presented to Parliament on Thursday sets out plans for airports at Katunayake, Ratmalana, Mattala, Sigiriya and China Bay, and for ports at Colombo, Galle and Trincomalee. It makes no mention of Jaffna International Airport at Palaly or the harbour at Kankesanthurai, the Northern Province’s two direct links to southern India. Both projects have been promised for years. In 2024, the Indian High Commission in Colombo said India would pay for the rehabilitation of the Kankesanthurai harbour with a grant of USD 63.65 million, in place of the line of credit first planned. In January this year, speaking at an event near Jaffna, President Dissanayake said India had agreed to provide USD 60 million, and that work at the port would begin very soon. He also said the government planned to address the shortcomings at Palaly. India’s Ministry of External Affairs has since said the port project will be carried out through a USD 61.5 million grant. In September, the High Commission said India had committed USD 65 million in all, including consultancy work. The memorandum of understanding needed to begin the work has not been signed. Ports and Civil Aviation Minister Anura Karunathilaka said recently that negotiations had reached their final stage, and officials say only Cabinet approval in the two countries remains. At Palaly, the ministry has said a new passenger terminal will be finished by July 2027\. Officials have said they are considering a longer runway so that aircraft bigger than the 70-seat planes now flying in from Chennai and Tiruchirappalli can land. The passenger ferry between Kankesanthurai and Nagapattinam in Tamil Nadu, relaunched in August 2024, had carried more than 25,000 passengers by June this year. Much of the money for both projects comes from outside the Treasury budget: the port from the Indian grant, and the airport partly through the Civil Aviation Authority. Last year’s budget speech, however, had included the Jaffna airport in a Rs. 1 billion allocation for regional airports. This year’s speech does not refer to either facility. The largest allocation for the region is for families displaced by the war. The President told Parliament that 13,000 families from the North and East have still not been resettled, more than 17 years after the fighting ended. He said his government would resettle all of them within two years, and the budget sets aside Rs. 10 billion for the purpose. The speech does not say how the resettlement will be carried out. It does not identify the families or say where they are living now. Nor does it say whether they will return to the land they left or be given land elsewhere. In parts of the North, land that families left during the war is still held by the security forces, and the speech makes no reference to releasing it. The budget documents describe the money only as funding for houses. The speech names places in the North and East in dozens of other line items. They include a Rs. 41 billion water scheme for Kilinochchi, a Rs. 5 billion fisheries package centred on the Pesalai harbour in Mannar, five bridges in the Mullaitivu, Trincomalee and Batticaloa districts, and a 400-kilovolt power line from Kilinochchi to New Habarana. The government also proposes to take four district hospitals in the Northern Province out of provincial control. By Jaffna Monitor’s count of the speech and its seven annexures, allocations reserved solely for the two provinces total about Rs. 24.1 billion in 2027\. That is roughly 1.2 percent of the Rs. 2 trillion the government plans to invest next year, including reconstruction after Cyclone Ditwah. The count leaves out projects the provinces share with other regions, such as the Rs. 7.5 billion Lower Malwathu Oya scheme, which also serves Anuradhapura. It also leaves out the Rs. 2 billion each of the country’s 25 districts receives under the District Development Programme. Five expressway sections and their link roads in the Western, North Western, Central and Sabaragamuwa provinces will receive Rs. 146.5 billion next year. The electrification of three suburban railway lines out of Colombo will receive Rs. 80 billion. Together, those two programmes get more than nine times what the count found for the North and East. In the 2024 parliamentary election, the governing National People’s Power won three of the six seats in the Jaffna electoral district, the first time a party from the south had topped the poll there. Besides the airport, the port and the occupied land, the speech does not mention provincial council elections, the Office on Missing Persons, the Office for Reparations, the Prevention of Terrorism Act or the excavation of mass graves such as the one at Chemmani in Jaffna. The words “Tamil” and “reconciliation” do not appear in its English text. A budget speech does not account for every rupee. Recurrent costs and continuing projects are set out in the ministry estimates tabled with the Appropriation Bill, and further spending in the two provinces may be found there. This report is based on the speech and annexures released by the Ministry of Finance on Thursday. ## Resettlement and housing The Rs. 10 billion comes in two parts. Rs. 6 billion is already in the 2027 estimates, under the heading of resettlement and permanent houses for conflict-affected families. The President proposed a further Rs. 4 billion, which the annexure of new proposals lists as construction of houses for displaced people in the North and East. Divided among 13,000 families, the money comes to about Rs. 770,000 each. That is roughly half the Rs. 1.5 million the government will pay next year for each house under its main low-income housing programme. The speech does not say how many families will be resettled in 2027, which agency will carry out the work, or whether any of the money is for land. A separate Rs. 1 billion is for families whose houses were damaged by Cyclone Ditwah but who did not qualify for help under the existing rules. The areas the speech names include Abaranchimulla, Serakkuliya, Mangalapura, Kandasamy Nagar and Nithya Nagar in Vavuniya, as well as Mullaitivu. Across the country, Rs. 5 billion will pay up to Rs. 500,000 each to finish houses left half-built under assistance schemes run between 2015 and 2019\. The government also plans 10,000 low-income houses in 2027 at a cost of Rs. 15 billion. The speech gives no district breakdown for either programme. ## Water The Greater Kilinochchi Water Supply Project will serve the Karachchi, Kandavalai, Poonakary and Pachchilaipalli divisions. Its Rs. 1.8 billion allocation for 2027 covers about 4 percent of the project’s Rs. 41.14 billion cost. Another Rs. 1 billion is earmarked to deal with seawater intrusion, hardness, high mineral content and bacterial contamination in drinking water in the Jaffna and Vanni districts. Rs. 5.19 billion will start 13 drinking water projects in places including Jaffna, Mannar, Mullaitivu, Vavuniya, Valachchenai and Nainativu, which the speech calls by its Sinhala name, Nagadeepa. The sum also covers a scheme at Kotte. The speech does not divide it among the projects, though an annexure lists Rs. 300 million for Valachchenai. The Jaffna Irrigation Project, intended to secure water for the peninsula, shares a Rs. 75 million allocation for further feasibility studies. The President said a study of the project was completed in 2018 but that it was never carried out. ## Fisheries The second-largest allocation reserved for the region is Rs. 5 billion for fisheries infrastructure in the Northern Province, anchorages and the Pesalai Fishery Harbour on Mannar Island. The speech did not say where the anchorages would be built. North Sea Limited, the state-owned company that makes and repairs fishing nets, will receive Rs. 500 million in equity to buy machinery and build a new manufacturing and repair centre. Its factory at Gurunagar in Jaffna was upgraded with an Indian grant in 2013. For fishermen across the country, compensation for a fisherman killed at work doubles to Rs. 2 million, and fisheries businesses become eligible for the 5 percent Re-MSME loan scheme. There is nothing in the speech on bottom trawling by Indian boats in northern waters, a long-standing complaint of fishermen in Jaffna and Mannar. ## Irrigation and land The Lower Malwathu Oya Project, already under construction, receives Rs. 7.5 billion for the Anuradhapura, Vavuniya and Mannar districts. The President said it would also ease flooding in Mannar. Rs. 1 billion will start the Mundeni Aru River Basin Development Project, which is meant to supply water and reduce flood risk in Batticaloa and Ampara. An annexure lists Rs. 2 billion for the Kivul Oya Reservoir Project, which the President did not mention in his speech. The Cabinet revived the project in January, saying it would ease water shortages, low farm output and poverty in Vavuniya and Mullaitivu. In February, residents and Tamil political parties protested at Nedunkerny in Vavuniya North and called for it to be stopped. Residents have said they fear losing their land. The Agriculture Ministry told Northern Province MPs that people from other areas would not be brought in to settle there, and the MPs asked the government to reconsider. The budget adds Rs. 300 million for goat farms in districts including Mannar and Batticaloa. It provides Rs. 100 million for the palmyrah industry in the North, the East, Hambantota and Puttalam. The speech’s section on land deals only with title registration and the Bimsaviya programme. ## Energy and Trincomalee Rs. 500 million goes to preliminary work on a 400-kilovolt transmission line from Kilinochchi to New Habarana. The government wants it finished by 2030 and expects USD 150 million from the Asian Infrastructure Investment Bank to build it. A synchronous condenser, used to steady the grid as more wind and solar power is added, will be installed at a new site in Mannar with World Bank financing between 2027 and 2029\. Bids for oil and gas exploration in four blocks of the Mannar Basin are due to be opened on 2 February. The speech presents Trincomalee as a future fuel storage hub, to be developed through state and international partnerships. Two of five selected tanks at the Upper Tank Farm have been repaired, and the Ceylon Petroleum Corporation expects to spend Rs. 7.375 billion on a pipeline from the tank farm to the port. In 2027 the government will seek proposals to develop 29 of the 61 tanks owned by Trinco Petroleum Terminal, the corporation’s joint venture with Lanka IOC. Airport and Aviation Services will invest in China Bay Airport, including its passenger terminal, though the speech gives no figure. The Cabinet has approved allocating 58 grids of mineral sands along the eastern coast to Lanka Mineral Sands Limited, and a committee is choosing an investor to process them. A new immigration office complex will be built in Trincomalee. ## Roads and transport The five bridges receive Rs. 2.04 billion in 2027 toward a total cost of Rs. 10.63 billion: - a bridge and road across the Kokkilai Lagoon: Rs. 600 million - the Kiran Bridge: Rs. 400 million - the Pondukalchenai Bridge: Rs. 200 million - a new bridge over the Verugal River at Punnaiyadi: Rs. 340 million - the Vadduvakkal Bridge: Rs. 500 million No expressway allocation extends beyond Dambulla, and the rail electrification programme covers only lines out of Colombo. The budget provides Rs. 5 billion for five new trains and Rs. 2 billion to repair stations, and names no work on the Northern line. The Metro Bus service introduced around Colombo this year is to be extended to Jaffna, Kandy and Galle. ## Health The government proposes to transfer the District General Hospitals in Mannar, Mullaitivu, Vavuniya and Kilinochchi, along with those in Gampaha and Avissawella, from the provincial councils to the central government. The President said people in those areas had asked for the change and that it would give them care at the level of national hospitals. The hospitals are run under the system of devolution created by the 13th Amendment. Sri Lanka has not held provincial council elections in more than ten years, and the Northern Provincial Council has had no elected members since its term ended in 2018\. In May, Tilvin Silva, general secretary of the Janatha Vimukthi Peramuna, said the elections could not be held this year. Batticaloa Teaching Hospital is one of five hospitals sharing Rs. 1.245 billion for new projects, including staff quarters. The Trincomalee Siddha Teaching Hospital is one of nine institutions sharing Rs. 510 million for feasibility studies and plans. ## Education Eastern University will get a building for its Faculty of Science, and the University of Jaffna one for its Faculty of Allied Health Sciences. Both come from a Rs. 2.25 billion fund shared with six other universities. The University of Jaffna’s Kilinochchi premises will get clean drinking water and sanitation, and the University of Vavuniya will start a Rs. 2.05 billion project to house its staff. The annual allowance for Dhamma School teachers rises from Rs. 7,500 to Rs. 12,500\. The speech names no comparable increase for teachers at Hindu, Muslim or Christian religious schools. ## Towns, courts and industry Jaffna, Batticaloa and Vavuniya are among ten towns in a Rs. 2.7 billion urban development programme. Trincomalee, Kantale and Kalmunai are among 19 towns sharing Rs. 5 billion. The Dutch forts at Jaffna, Mannar and Batticaloa are to be developed as tourist sites with private partners, and Delft, Nainativu and Analaitivu as “model islands.” Courts in Jaffna, Batticaloa, Trincomalee and Mannar will share in a Rs. 5.115 billion upgrade, and Vavuniya will get a new District Secretariat. A Rs. 4 billion allocation for industrial estates covers the Valachchenai estate and a feasibility study for one at Puliyankulam. The idle Kurunchativu salt pan north of Elephant Pass will be reopened with National Salt Limited’s own money. Earlier this year the government had looked for foreign investors after local investors showed no interest. The allocation for the Anuradhapura Sports Complex rises from Rs. 50 million to Rs. 1 billion. The speech said the complex would give the North Central, Northern and Eastern provinces access to international-standard facilities. ## Tamils abroad The budget offers a new route to citizenship for the descendants of Sri Lankans living overseas, a group that includes much of the Tamil diaspora. Under a “Global Sri Lankan Heritage Citizen” programme for the second and third generations of the overseas community of Sri Lankan origin, the government will grant dual citizenship free of charge to the spouse and children of an applicant and to third-generation children. The speech did not say when the programme would begin or what other conditions would apply. Migrant workers will be offered housing loans of up to Rs. 5 million, with interest subsidies of 10 percent on the first Rs. 3 million and 5 percent on the rest. The government expects remittances to pass USD 9 billion this year. The speech is silent on the Sri Lankan Tamil refugees living in India and on any programme for their return. ## The Malaiyaha Tamil community The speech does not name the Malaiyaha Tamil community, but several measures concern the plantation sector, where many of its members work. The government will speed up construction of 10,000 houses for the plantation community, a programme carried out with Indian assistance, though the speech gives no allocation or timetable. Rs. 3 billion is allocated for field rest rooms, toilets and the repair of Praja Shakthi centres for plantation workers. The Rs. 200 daily incentive allowance paid to estate workers last year will continue in 2027. The leases under which Regional Plantation Companies run the estates expire in 2045\. The Cabinet has appointed a committee of officials to review them, with the stated aim of protecting the rights of both owners and workers and assessing the productivity of each estate. Tea smallholders, who grow about 70 percent of the country’s tea, will receive a fertiliser subsidy of Rs. 4,000 a bag at a cost of Rs. 5 billion, along with Rs. 820 million for replanting. Rs. 730 million will set up 500 tea villages in six provinces. Rs. 1 billion will buy 50 small buses for rural areas with narrow hill roads. Trains on the cyclone-damaged Up-Country line are expected to run to Kandy in the first quarter of 2027 and to Badulla by the middle of the year. The speech does not address the daily wage of estate workers or land ownership for plantation families. ## Allocations reserved for the North and East, 2027 - Resettlement of 13,000 conflict-displaced families: Rs. 10,000 million - Northern Province fisheries infrastructure and Pesalai Fishery Harbour: Rs. 5,000 million - Kivul Oya Reservoir Project (annexure only): Rs. 2,000 million - Five bridges: Rs. 2,040 million - Greater Kilinochchi Water Supply Project: Rs. 1,800 million - Drinking water quality in Jaffna and the Vanni: Rs. 1,000 million - Mundeni Aru River Basin Development Project: Rs. 1,000 million - Kilinochchi to New Habarana transmission line: Rs. 500 million - North Sea Limited: Rs. 500 million - Valachchenai Water Supply Scheme: Rs. 300 million - Total: Rs. 24,140 million ## The national budget The government expects revenue of Rs. 6.15 trillion in 2027, or 15.8 percent of GDP, and spending of Rs. 7.67 trillion. A Rs. 260 billion supplementary estimate for cyclone reconstruction, tabled after the speech, raises spending to Rs. 7.93 trillion. It also raises the deficit from 3.8 percent of GDP to 4.5 percent. Interest payments of Rs. 2.64 trillion are the largest single expense. The economy grew 5 percent in 2025\. Central government debt fell from 114 percent of GDP in 2022 to 95 percent at the end of 2025\. Inflation rose from 2.1 percent last December to 8.3 percent in October, which the government attributed largely to fuel prices driven up by the war in the Middle East. The IMF programme ends in March, and a Cabinet committee will advise on whether Sri Lanka should seek another. SriLankan Airlines has lost Rs. 528 billion since the state took it back in 2008. The monthly income on which no tax is paid rises from Rs. 150,000 to Rs. 162,500 in April, and the tax bands are widened. The government says taxpayers will save between Rs. 750 and Rs. 15,750 a month. Books and exercise books will be exempt from VAT. From 13 November, the levy on imported sprats falls from Rs. 100 to Rs. 10 a kilogram and on Maldive fish from Rs. 302 to Rs. 10, and the levy on sugar rises by Rs. 10\. Import cess rates on 800 items are cut by a quarter, and the Tourism Development Levy is abolished. Capital gains tax is extended to cryptocurrencies, telecommunications licences and high-value gems and jewellery. Rs. 230 billion goes to Aswesuma and other welfare payments. Monthly allowances for kidney patients and persons with disabilities rise from Rs. 10,000 to Rs. 12,500\. The final phase of the 2025 public sector pay rise costs Rs. 110 billion. The DAT allowance for doctors rises from Rs. 70,000 to Rs. 95,000, the special duty allowance for nurses doubles to Rs. 12,000, and university academics will get Rs. 25,000 more a month. Each increase is paid in two stages. Police officers, soldiers, prison officers and Grama Niladharis also get higher allowances. Pensioners who retired between 2020 and 2024 will receive an interim Rs. 2,500 a month from July. Rs. 67.7 billion in interest subsidies is expected to support Rs. 174 billion in cheap loans for small businesses, including group loans of up to Rs. 1 million at 3 percent for women-headed families. Households that fit rooftop solar panels with batteries will receive up to Rs. 250,000\. Rs. 26.5 billion is planned to strengthen the national grid after island-wide blackouts in February 2025 and October 2026\. The Ministry of Digital Economy’s allocation rises to Rs. 28.5 billion, and 750,000 school students will receive broadband vouchers. The paddy fertiliser subsidy of Rs. 30,000 a hectare costs Rs. 44 billion, and the plantation sector as a whole receives Rs. 13 billion. Irrigation and drinking water receive Rs. 77 billion each. Public transport gets Rs. 95 billion, including depots and chargers for 100 electric buses donated by China. Compensation for a house damaged by wild elephants rises from Rs. 200,000 to Rs. 1 million. Prisons hold about 36,500 inmates in space for 16,500, and Rs. 300 million will start moving the Colombo prisons to Millewa. The speech gives no total for defence spending. Rs. 7 billion is allocated for artistic activities associated with the country’s ethnic and religious communities. Cyclone Ditwah damaged 1,328 places of worship, and the government has provided Rs. 722 million for their repair. Of these, 272 are Hindu, 199 Muslim, 99 Christian and 758 Buddhist. The President told Parliament that every new proposal would have an accountable institution, outcome indicators and a cash flow plan the public could follow. Parliament will now debate the Appropriation Bill.