During a meeting with potential investors in San Francisco, the Thai prime minister said that the Landbridge project will cost around 1 trillion baht or around USD 28 bn. It will include building seaports on the western and eastern side of the country’s southern Kra Isthmus and connecting them by highways and a railway network.
Once up and running, the project will help cut travel time between the Indian and Pacific Ocean by an average of four days and subsequently lower shipping costs by 15 percent. Today, the bulk of the freight traffic from China to Europe goes through the Malacca Straits between Malaysia, Indonesia and Singapore.
“The Landbridge will be an additional important route to support transportation and an important option for resolving the problems of the Melaka Strait,” Prime Minister Srettha said during the meeting with investors. “This will be a cheaper, faster and safer route.”
Today the Malacca Straits are the world’s busiest sea route, accounting for more than a quarter of the global goods’ flow. The creation of a corridor alternative to the Malaysian straits will help the international flow of goods as the Malacca Strait is likely to experience congestion in the coming years, which should result in longer travel time and higher costs. Estimates claim that by 2030 the traffic volumes will exceed the Strait’s capacity by 2030.
The Landbridge project will see a construction of a port at Ranong on the Andaman Sea on the west side of the southern peninsula and in the Chumphon province on the Bay of Thailand. The circa 100 km distance between the two ports will be covered by highways and a new railway line.
Thailand is planning to invite foreign investors to take part in the project. These investors will be allowed to hold majority stakes in joint-ventures set up with local companies to build the ports and the transport infrastructure. Reportedly, a number of American investors, such as Oracle, SSA Marine Inc and Port of Long Beach are interested in taking part in the project.
The Americans are not the only parties interested in taking part in the Landbridge project. The nationthailand.com portal reported that during prime minister Srettha’s October visit to China, a number of local corporations expressed interest in joining the project. Reportedly, so has Saudi Arabia.
Furthermore, the new sea route will be a huge boost to the Thai economy. It is expected to create around 280,000 jobs and increase the country’s economic growth to 5.5 percent. That would mean doubling the growth rate as last year Thailand’s GDP rose by 2.6 percent.
For years Thailand has mulled the creation of a canal through the Kra Isthmus connecting the Gulf of Thailand with the Andaman Sea, but it never materialised due to environmental concerns.
Photo: Nicole Bratt from San Francisco, CA, USA, CC BY-SA 2.0, via Wikimedia Commons