ASEAN Beat | Economy | Southeast Asia

Thailand to Accelerate Planning on ‘Land Bridge’ Project, Minister Says

Deputy Prime Minister Phiphat Ratchakitprakarn said that the Hormuz crisis has “demonstrated the advantage” of controlling key transport routes.

The port of Ranong in southern Thailand.

Thailand’s government says that it will press ahead with its plan to build a “land bridge” in the country’s south, creating a link between the Indian and Pacific oceans that will bypass the Strait of Malacca.

Deputy Prime Minister Phiphat Ratchakitprakarn, who oversees the Ministry of Transport, told reporters yesterday that the current closure of the Strait of Hormuz highlighted the strategic value of key shipping routes, and that the government will now advance efforts to develop the 1 trillion baht ($31 billion) project.

“The Middle East conflict has demonstrated the advantage of controlling a transport route,” Phiphat said, as per Bloomberg. “Thailand will have a great advantage by operating the link between the Pacific Ocean and the Indian Ocean.”

The land bridge envisions the creation of a trade route across the narrow stem of southern Thailand that separates the Gulf of Thailand from the Andaman Sea. The intention is to create an alternative to the congested Malacca Strait, which would reduce shipping times between the two oceans by an average of four days, and cut shipping costs by about 15 percent, Phiphat said.

Specifically, the project will involve the construction of deep-water ports in Ranong and Chumphon provinces, and a 90-kilometer roadway and railway linking them. To advance the project, Phiphat said that the government must pass enabling legislation and that the cabinet is expected to approve a draft bill later this year. Construction of the land bridge would be completed by 2039, according to government studies. These also predict the project would break even in 24 years, generating 58 billion baht in its first year, largely from fuel sales to cargo ships.

The “land bridge” is the latest incarnation of a longstanding plan to create a trade route across the Isthmus of Kra. Up until recently, this was envisioned as a canal, an idea that dates back to the reign of King Rama I in the late eighteenth century. In more recent times, the Kra project has become a hardy perennial of Thai political discourse, with numerous governments launching feasibility studies, most recently under Prime Minister Prayut Chan-o-cha in 2018. For Thai politicians, the project has come to represent something of a charmed solution to the country’s economic challenges, which have grown more acute since the COVID-19 pandemic.

However, the gargantuan scale and cost of the canal project, and the security implications of creating a physical barrier between the restive southern provinces and the rest of Thailand, have prevented it from advancing beyond the planning stage.

All this makes it necessary to take yesterday’s announcement with a very large helping of salt. There have long been doubts about the project’s financial and environmental viability, from shipping experts, politicians, policy analysts, and concerned local residents alike.

These burst forth last August, when the Office of Transport and Traffic Policy and Planning (OTP) completed a detailed study into the project. Shortly afterward, Pukkamon Nun-anan, a lawmaker for the opposition People’s Party, told parliament that the government’s numbers “are implausible” and called for the cancellation of the project. The Democrat Party has also expressed its opposition.

Unlike a canal, critics argue, the land bridge would require goods transiting from the Indian to Pacific oceans to be unloaded at a port on one side of the isthmus, reloaded onto trucks or railcars, transported to the second port, where it would have to be reloaded onto a cargo ship for onward transport. As the Bangkok Post noted in an editorial last September, these logistical obstacles mean that the land bridge “will never rival the efficiency of Singapore’s Tuas Port, which is set to become the world’s largest fully automated shipping hub.”

Speaking to the Post last year, former Bangkok Deputy Governor Samart Ratchapolsitte said that the government’s feasibility study “seems engineered to justify the investment, but if you speak to real players in the maritime industry, the numbers simply don’t add up.”

Environmental experts also warn that the project could lead to around 1 billion baht in lost fisheries income per year, while six UNESCO World Heritage sites along the proposed corridor could be under threat, posing risks for the future of tourism in southern Thailand.

Earlier this month, a coalition of academics, environmental organizations, and civil society groups urged Prime Minister Anutin Charnvirakul to disclose all environmental and health impact assessment (EHIA) reports related to the project. In particular, they argued that the existing EHIA reports were too narrowly focused, and limited inadequate environmental impact coverage to a 5-kilometer radius of the two proposed ports.

Indeed, given the land bridge project’s extreme cost, uncertain economic return, and disruptive impact, it would be a surprise if it gets built at all, let alone within the government’s projected time frame.

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Thailand’s government says that it will press ahead with its plan to build a “land bridge” in the country’s south, creating a link between the Indian and Pacific oceans that will bypass the Strait of Malacca.

Deputy Prime Minister Phiphat Ratchakitprakarn, who oversees the Ministry of Transport, told reporters yesterday that the current closure of the Strait of Hormuz highlighted the strategic value of key shipping routes, and that the government will now advance efforts to develop the 1 trillion baht ($31 billion) project.

“The Middle East conflict has demonstrated the advantage of controlling a transport route,” Phiphat said, as per Bloomberg. “Thailand will have a great advantage by operating the link between the Pacific Ocean and the Indian Ocean.”

The land bridge envisions the creation of a trade route across the narrow stem of southern Thailand that separates the Gulf of Thailand from the Andaman Sea. The intention is to create an alternative to the congested Malacca Strait, which would reduce shipping times between the two oceans by an average of four days, and cut shipping costs by about 15 percent, Phiphat said.

Specifically, the project will involve the construction of deep-water ports in Ranong and Chumphon provinces, and a 90-kilometer roadway and railway linking them. To advance the project, Phiphat said that the government must pass enabling legislation and that the cabinet is expected to approve a draft bill later this year. Construction of the land bridge would be completed by 2039, according to government studies. These also predict the project would break even in 24 years, generating 58 billion baht in its first year, largely from fuel sales to cargo ships.

The “land bridge” is the latest incarnation of a longstanding plan to create a trade route across the Isthmus of Kra. Up until recently, this was envisioned as a canal, an idea that dates back to the reign of King Rama I in the late eighteenth century. In more recent times, the Kra project has become a hardy perennial of Thai political discourse, with numerous governments launching feasibility studies, most recently under Prime Minister Prayut Chan-o-cha in 2018. For Thai politicians, the project has come to represent something of a charmed solution to the country’s economic challenges, which have grown more acute since the COVID-19 pandemic.

However, the gargantuan scale and cost of the canal project, and the security implications of creating a physical barrier between the restive southern provinces and the rest of Thailand, have prevented it from advancing beyond the planning stage.

All this makes it necessary to take yesterday’s announcement with a very large helping of salt. There have long been doubts about the project’s financial and environmental viability, from shipping experts, politicians, policy analysts, and concerned local residents alike.

These burst forth last August, when the Office of Transport and Traffic Policy and Planning (OTP) completed a detailed study into the project. Shortly afterward, Pukkamon Nun-anan, a lawmaker for the opposition People’s Party, told parliament that the government’s numbers “are implausible” and called for the cancellation of the project. The Democrat Party has also expressed its opposition.

Unlike a canal, critics argue, the land bridge would require goods transiting from the Indian to Pacific oceans to be unloaded at a port on one side of the isthmus, reloaded onto trucks or railcars, transported to the second port, where it would have to be reloaded onto a cargo ship for onward transport. As the Bangkok Post noted in an editorial last September, these logistical obstacles mean that the land bridge “will never rival the efficiency of Singapore’s Tuas Port, which is set to become the world’s largest fully automated shipping hub.”

Speaking to the Post last year, former Bangkok Deputy Governor Samart Ratchapolsitte said that the government’s feasibility study “seems engineered to justify the investment, but if you speak to real players in the maritime industry, the numbers simply don’t add up.”

Environmental experts also warn that the project could lead to around 1 billion baht in lost fisheries income per year, while six UNESCO World Heritage sites along the proposed corridor could be under threat, posing risks for the future of tourism in southern Thailand.

Earlier this month, a coalition of academics, environmental organizations, and civil society groups urged Prime Minister Anutin Charnvirakul to disclose all environmental and health impact assessment (EHIA) reports related to the project. In particular, they argued that the existing EHIA reports were too narrowly focused, and limited inadequate environmental impact coverage to a 5-kilometer radius of the two proposed ports.

Indeed, given the land bridge project’s extreme cost, uncertain economic return, and disruptive impact, it would be a surprise if it gets built at all, let alone within the government’s projected time frame.

Sebastian Strangio is Southeast Asia editor at The Diplomat. 

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