Finance Minister Ravi Karunanayake said the government will be declaring a state of natural disaster situation to tackle the damage in the aftermath of last week's floods.
Currently the government was conducting an assessment of the damage. Initial estimates indicate that up to 128,000 houses would have been affected and up to 30,000 houses may be in need of reconstruction.
Some 25,000 to 30,000 businesses have been affected.
He said that in Colombo the flooding was largely due to rampant filling and illegal construction on marshy lands.
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Karunanayake said there will be stricter guidelines from June 1 for construction in such areas. "People will not be allowed to remain in the areas too vulnerable to flooding."
He said he was hoping for foreign assistance mostly in the form of grants and loans, but also called for overseas expertise in urban planning to prevent such disasters.
The heaviest rains in over 25 years last week had left 101 people dead, while another 100 were still listed as missing.
The aid agencies seek USD 3.6 million for the purpose and said the operation is to be implemented over a 18-month period during which they will provide essential household items, first-aid kits to 5,000 households.
President Maithripala Sirisena has declared all floods and landslide affected areas as emergency zones. Land reclamation in the area has been banned.
According to the Disaster Management Centre, some 3,40,000 people have been displaced across the country.