India has extended financial support for the passenger ferry service between Nagapattinam and Kankesanthurai (KKS) for another year, the Indian High Commission said in a statement, the Daily Mirror reported.
It is the third consecutive year of Indian funding for the route, which resumed in August 2024.
The money
The support runs through the Viability Gap Funding (VGF) mechanism and amounts to nearly Rs. 300 million a year — roughly Rs. 25 million a month. It covers key logistical and operational costs, on terms the High Commission describes as similar to the previous year.
VGF is a subsidy for a service that does not cover its own costs. The arrangement is an explicit statement that the crossing is not commercially self-sustaining at the fares being charged, and that India is willing to meet the shortfall for a third year running rather than let the route lapse or the fares rise.
Update — September 21: Hiru confirms the extension and states its purpose
Hiru News has since reported the same extension, corroborating the Rs. 300 million annual figure, the third consecutive year of support, the August 2024 resumption and the 52,000 cumulative passengers.
It adds the stated purpose of the money, which the Daily Mirror account did not give: the funding is intended to keep passenger fares affordable and to support the service’s operational sustainability by covering logistical and operating expenses. That confirms the inference above — the subsidy exists to hold fares down rather than to cover a temporary shortfall.
Hiru also names the President whose December 2024 visit to India the commitment is tied to as Anura Kumara Dissanayake, and repeats that both countries are exploring additional ferry routes alongside the US$ 65 million Kankesanthurai Harbour rehabilitation.
The traffic
The service has carried around 52,000 passengers since it resumed in August 2024 — an average of roughly 2,000 a month across the 26 months it has been running.
Against a subsidy of about Rs. 25 million a month, that works out at approximately Rs. 12,000 of Indian public money per passenger carried. The figure is a crude average across the whole period rather than a current-year unit cost, since neither the passenger numbers nor the subsidy are broken down by year, but it gives the order of magnitude the funding decision is being taken at.
What comes next
The High Commission said future plans include the rehabilitation of Kankesanthurai Harbour under an Indian grant of US$ 65 million, along with the exploration of additional routes and services.
The statement ties the extension to commitments made during the Sri Lankan President’s visit to India in December 2024 and Indian Prime Minister Narendra Modi’s visit to Sri Lanka in April 2025.
Context
The route connects the Jaffna peninsula with the Tamil Nadu coast in a crossing of roughly four hours each way, and has been promoted as a low-cost alternative to flying. It has not run smoothly: a ferry carrying 144 passengers was stranded off Nagapattinam for hours after an engine failure in May, and in June 26 people were detained over gold smuggling on the service.
The KKS harbour grant has featured in the broader bilateral agenda, including Indian Foreign Secretary Vikram Misri’s visit to Colombo in August.
A note for readers searching this story: because the extension is announced annually, searches return near-identical High Commission statements from previous years, with the same VGF mechanism and a similar rupee figure. The discriminator is the cumulative passenger count — 52,000 marks the third-year announcement.
Not reported
The Daily Mirror does not say when the extension takes effect or when it expires, name the operator of the service, or give the current fare. It does not break the 52,000 passengers down by year or by direction of travel, so it is not possible to say whether traffic is growing or falling.
It does not state the total Indian outlay across the three years, say whether Sri Lanka contributes anything, or explain what would happen to the service if the funding were withdrawn. It gives no timeline or start date for the US$ 65 million Kankesanthurai Harbour rehabilitation, and does not identify the additional routes under consideration.
Hiru’s September 21 account closes the question of what the money is for, but leaves the rest of these gaps open: it likewise gives no operator, no fare, no effective or expiry date, no per-year passenger split and no total three-year outlay.
