The head of the island's road development authority R W Pemasiri says negotiations are underway with the Asian Development Bank, a Korean contractor and a Sri Lankan consortium to get additional funding.
The first section from the capital Colombo to the southern port town of Galle is scheduled for completion in the latter part of 2010, Pemasiri said.
However additional funds were needed to complete the section from Galle to Matara.
Pemasiri says originally the southern highway was to have two lanes from Colombo to Matara. But later a decision was made to widen it to four lanes.
Three contracts had been issued for sections starting from Colombo to Dodangoda, from Dodangoda to Kurundugaha Hetekma and from Kurundugaha Hetekma to Matara.
The contracts were changed to allow for four lanes.
Pemasiri says due to unforeseen ground conditions and cost escalations, the funds originally raised for the highway were not enough to complete the section from Galle to Matara.
Work on the se