Thailand's long-standing deliberation about a new maritime trade route between the Andaman Sea and the Gulf of Thailand has resurfaced, amid Prime Minister Srettha Thavisin's efforts to revive the project and attract foreign investment.

According to Thai English-language news site Thai PBS World, Srettha's government decided in February 2024 to proceed with the 1 trillion baht (S$37 billion) project in Ranong, southern Thailand, after a government-backed feasibility study.

Srettha's vision for a "land bridge" is different from previous attempts to dig a canal through the isthmus of Kra in Southern Thailand.

This project involves constructing two new deep-sea ports on the eastern and western coasts of the isthmus, as well as highway and railway systems connecting the ports, resulting in a connection over land, reported The Bangkok Post.

It is expected to be completed by 2039, with the first phase likely to finish in 2030.

Purpose

The project aims to reduce shipping costs and travel time, and is set to be a maritime trade alternative to the busy Malacca Strait — and Singapore's port.

The Malacca Strait is a narrow waterway between Malaysia and Singapore, but is also the shortest route connecting Asia Pacific to India and the Middle East.

Ships currently take about nine days when travelling through the Malacca Strait, the main maritime trade route in the region.

Based on the feasibility study, the land bridge will cut the travel time down to five days, reported The Bangkok Post.

A 90-kilometre land bridge consisting of roads and railways will be built across the southern part of the country, stretching from Ranong to Chumphon.

The land bridge project will also use the transshipment method, according to Nikkei Asia.

With transshipment, cargo containers would be unloaded from a ship at one port, transported across the land bridge, and then transferred to another ship at the other port headed to the final destination.

Past attempts

The dream of forging a connection through Kra, whether by land or sea, is not new.

The idea was supposedly first suggested by King Narai over 300 years ago, who thought of digging a canal from Songkhla to Burma (present day Myanmar), dating back to 1677.

However, the king consulted a French engineer who told him it was not possible with the technology of the time.

In 1897 and 1946, the British signed agreements with Siam (Thailand's previous name) not to construct an "inter-oceanic canal", so as to protect the importance of their Malayan holdings, including Singapore.

Still, the idea would not fade away.

Governments under subsequent Thai leaders have explored the Kra Canal project and even proposed the idea to foreign parties.

Notable attempts so far:

1972: Chinese-born Thai industrialist KY Chow funds feasibility study on constructing a canal, but plans fell through due to the 1973 Oil Crisis.

1980s: Japan's Mitsubishi Research Institute revisits the study over concerns for Japanese energy imports, but nothing came of it.

2005: Project was revisited by then-Prime Minister Thaksin Shinawatra, but fell through after he was ousted during a military coup in September 2006.

2015: Thailand and China reportedly signed a Memorandum of Cooperation (MOC) to proceed with the Kra Canal project, under then-Prime Minister Prayut Chan-o-cha's government.

The canal would have been 102-km long, 400 metres wide and 20 metres deep, shortening the journey between the Indian Ocean and the Pacific Ocean by 1,200 km.

However, officials from the two countries later denied the MOC signing.

2017: Prayut Chan-o-cha's military government, reportedly including people with close business ties to China, attempted to convince him to approve a feasibility study on the canal.

This would entail the construction of a "450-metre-wide and 26-metre-deep canal capable of carrying the world's biggest oil tankers, container ships and bulk carriers".

The plan fell through despite reported support from China, as Prayut said that he had "urgent work to finish" and recommended the project be proposed in the next government.

2023: Srettha revived the idea after officially starting his prime minister role in August 2023, with adjustments to the previous proposal such as the construction of a land bridge instead of a canal.

He actively pushed for the revised project and met with foreign potential investors.

2024: Thailand's House of Representatives approved a feasibility study in February 2024 despite opposition and some concerns surrounding the study's reliability.

Challenges

Unlike the Kra Canal, the land bridge project was deemed feasible based on the study.

But it bears its own challenges financially, geopolitically, and environmentally.

Financial

Srettha said that the land bridge project is Thailand's largest investment project after the Suvarnabhumi Airport in Bangkok, The Bangkok Post reported.

The feasibility study revealed that its payback period is 27 years.

The payback period is the length of time an investor needs to recover the amount invested or reach a breakeven.

It also costs more to construct than simply upgrading the underused Songkhla port, the largest port in southern Thailand.

According to Nikkei Asia, Songkhla port director Wathanachai Raunglertpanyakul said that adjusting the port's depth would only cost the government 100 million baht (S$3.7 million) per year.

Political and economic analyst Somjai Phagasisvivat said: "The project may take at least 10 years before it can materialise as it involves attracting investors, analysing the budget, infrastructure and utilities."

Geopolitical

The project also presents geopolitical implications in the region.

According to New Straits Times, Malaysia's ports will be affected by changes in shipping patterns, which may result in "potential loss of logistics, refuelling, and supply services."

And any Kra Canal development might affect the use of Singapore's port, although perhaps not as much as some may think.

According to the ISEAS-Yusof Ishak 2019 study:

"Detractors of the canal remain unconvinced. Their main argument is that a Kra canal is commercially unviable:

That the massive construction costs could not be clawed back from toll fees as shipping companies would be reluctant to bear additional costs just to save two or three days sailing time (especially at a time when the price of oil is low)—

a situation quite unlike the Suez and Panama Canals which save vessels weeks of extra time at sea."

Environmental

Although an environmental impact assessment is still ongoing and expected to finish in September 2024, the project was still met with criticism surrounding environmental issues.

While other large shipping businesses and port operators are starting to become more environmentally friendly, Thailand's logistic ecosystem is reportedly still not meeting international standards.

Former opposition party Move Forward Party leader Pita Limjaroenrat criticised the study and claimed that heritage sites in the areas involved risk being harmed by possible land expropriation and oil leaks, reported The Nation.

He added that the report also failed to confirm the well-being of residents, especially those involved in fishery.

Fate unclear

The first phase of construction will supposedly begin in September 2025 and expected to be completed by September 2030.

However, it is not clear whether Srettha's government will be able to see through the project since the government has yet to tackle the underlying issues presented by its construction, including those found in earlier versions under past governments.

Top photo via Srettha Thavisin/X