Proposed Malwathu Oya Reservoir is located across Malwathu Oya at Kappachchi which lies in Anuradhapura and Vavuniya Districts. This project envisages construction of 209 MCM capacity reservoir, 3,590 m long earth dam, Radial Gated Spillway, Left Bank, Right Bank and River Sluices, Canal systems to new settlement area and power house.

Stored water at proposed reservoir is released through the river sluice to the Malwathu Oya and picked up at Tekkam Anicut (24 Km d/s from Proposed Malwathu Oya Reservoir). From Tekkam Anicut 500 Cusec and 250 Cusec capacity Right bank and Left bank canals respectively convey water to irrigate 24,450 acres and 6,230 acres under existing Giant’s tank and Akitamuruppu tank respectively. 2,000 acres of new irrigable lands just downstream of the Reservoir is proposed for introducing the commercial farming and 675 acres of lands identified for paddy cultivation .Other expected benefits are, provision of 2.0 MCM of domestic water annually for the new settlers, generation of 4.28 GWH Hydro power energy annually and improvement of agricultural activities, livestock development and other infrastructure development .Total Project Cost is Rs12, 000 Million.

By now, the feasibility studies of the project have been finalized and final report will be prepared once EIA studies are finished. A Joint Cabinet Memorandum was forwarded by the Ministry of Agriculture and the Ministry of irrigation and it was approved by the Cabinet of Ministers to award the contract to China CAMCE Engineering Co. Ltd. as it is recommended by the Cabinet Committee on Economic Affairs. Resettlement works are to be done.