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Ports’ good days in Malaysia and Singapore are numbered
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KUALA LUMPUR, March 28, 2024: Thailand is moving forward with constructing a US$28 billion 90km-long land bridge.
If/When completed, the bridge can potentially redirect shipping trade away from ports in Malaysia and Singapore.
The bridge will reduce the time taken to transport goods through the Malacca Strait by six to nine days.
This means the good days for ports and the shipping industry in Malaysia and Singapore are, obviously, numbered.
According to Seasia.co, the land bridge project is designed to provide a new trade route between the Indian and Pacific Oceans.
It will include two deep sea ports on Thailand’s eastern and western coasts as well as a rail and road system linking them together.
The eastern port will be located in Chumphon province on the Gulf of Thailand and the other in Ranong province on the Andaman Sea.
The first phase of the land bridge project is expected to finish in 2030, with the final completion targeted in 2039.
Deep sea ports would be built at either end of the “bridge”, where containers would be unloaded, transported across the peninsula, and continue on another ship in Thailand.
No News Is Bad News reproduces news reports and video clips (above) by Singapore’s Channel News Asia (CNA) on the land bridge project. But do take the negative views with a pinch of salt as the Island Republic’s shipping industry is at stake:
Commentary: Thailand’s Kra land bridge - a white elephant comes charging back
Thai Prime Minister Srettha Thavisin has revitalised the idea of the land bridge across the Kra Isthmus with gusto. Poor economic viability, environmental problems and geopolitical complications account for the project’s tepid international reception, says an ISEAS-Yusof Ishak Institute senior fellow.
Thailand's Prime Minister Srettha Thavisin at the Belt and Road Forum in China, October 2023. (Photo: Reuters/Tingshu Wang/Pool)
21 Jan 2024 06:00AM
SINGAPORE: Bad ideas can be surprisingly durable. In Thailand, this is certainly the case with the ruling elite’s centuries-old obsession with building a transport corridor across the Kra Isthmus.
Since the late 17th century, the Thais have endlessly debated the pros and cons of cutting a canal across the narrow neck of land in the south of the country. But a Kra canal has never been built due to eye-watering construction costs, engineering challenges and weak economic rationales.
But the latest iteration of this proposition is being enthusiastically promoted by the newish government of Prime Minister Srettha Thavisin.
Since taking office in August 2023, Srettha’s policy focus has been laser-like: To revitalise the Thai economy after a decade of sluggish growth caused by military mismanagement and compounded by the COVID-19 pandemic.
To that end, the government has prioritised the signing of free trade agreements, while Srettha himself has crisscrossed the globe courting foreign investment. Bangkok, casting an envious eye on Singapore, also has ambitions to play a much bigger role in global supply chain networks.
In pursuit of this grand economic vision, Srettha has become proponent-in-chief of another old idea: The construction of a so-called land bridge across the Kra Isthmus.
REVITALISING THAKSIN SHINAWATRA’S IDEA
The plan calls for the construction of deep-water ports in Chumphon province on the Gulf of Thailand side of the isthmus and Ranong province on the Andaman Sea side. The two ports would be linked by 90km of highways, railways and pipelines.
Ships carrying goods made in Northeast Asia would unload their cargoes in Chumphon which would then be whisked to the other side by trucks and trains, while vessels laden with wares from western Asia and Europe would do the same at Ranong.
The land bridge was first proposed by then prime minister Thaksin Shinawatra in 2005, but was snuffed out a year later when he was ousted in a military coup. Ironically, following another coup in 2014, the military resurrected the idea in 2020, though it failed to gain traction because of the global economic dislocation caused by the pandemic.
Srettha has revitalised the idea with gusto, recycling arguments long trotted out by proponents of the Kra Canal.
First, by bypassing the increasingly congested Straits of Malacca, shipping companies will save three to four days sailing time, thereby reducing transportation costs by 15 per cent.
Second, construction of the land bridge will provide a 1.3 trillion baht (US$370 billion) boon to the economy, raising economic growth by 1.5 per cent and providing jobs for 280,000 workers. It would particularly benefit the economy in the south where the ruling coalition parties fared poorly in the May 2023 general election.
Third, the land bridge would place Thailand at the heart of Southeast Asia’s supply chains.
COST OF BYPASSING STRAITS OF MALACCA
As with the Kra canal, critics of the land bridge have called into question the project’s economic viability. Bypassing the Malacca Straits may well reduce sailing times, they argue, but off-loading goods at one end, transporting them to the other end, and then re-loading them onto other ships could take just as long as sailing through the straits and would actually increase transportation costs.
In addition, the land bridge would have a negative impact on the environment, hurting southern Thailand’s tourism and fishing industries. Moreover, geopolitically, ownership of the land bridge might suck Thailand into the vortex of US-China competition, especially if Beijing was to fund its construction.
Undeterred by these arguments, Srettha has said he is determined to see the project through and has even proposed a timeline. Construction companies would bid for contracts in mid-2025 with construction slated to begin later the same year and completed by 2030, at a total cost of around US$30 billion.
WOULD US OR CHINA PAY FOR THAILAND’S BRIDGE?
What Srettha has been coy on is who would pay for the land bridge. A project of this size requires massive foreign investment. The prime minister has pitched the idea in America, China and Japan. So far the response has been polite but non-committal.
Although Chinese construction companies would be well-placed to build the ports, roads and railways required, Beijing itself is unlikely to adopt the project as part of its Belt and Road Initiative (BRI).
As China’s economic growth splutters, its leaders have become far more cautious about funding giant overseas infrastructure projects, especially ones of questionable economic value like the land bridge. Tokyo also appears uninterested.
Tellingly, none of the world’s major shipping companies have rushed to endorse Srettha’s proposal.
Singapore, the world’s second-busiest container port and a potential loser if the land bridge goes ahead, has responded in very measured tones. When questioned in parliament about the project last year, then Acting Transport Minister Chee Hong Tat (Mr Chee has since been appointed Transport Minister) highlighted the increased transport costs the land bridge’s double-handling of containers would incur, and pointed to Singapore’s efforts to improve connectivity, productivity and efficiency in the country’s ports, and the increased capacity the new Tuas megaport will provide.
Srettha has clearly nailed his flag to the land bridge mast, but his own political future remains uncertain, with many observers viewing him as simply a placeholder for Thaksin’s daughter and leader of the Pheu Thai Party, Paetongtarn Shinawatra.
If Srettha is replaced within the next couple of years, the land bridge idea may well sink with him.
Should this happen, advocates of Kra transportation links need not fret. Soon after he is gone, the proposal will almost certainly resurface again, in one form or another.
Ian Storey is Senior Fellow at ISEAS - Yusof Ishak Institute and editor of Contemporary Southeast Asia. This commentary first appeared on the ISEAS-Yusof Ishak Institute's blog, Fulcrum.
Source: Others/ch
Analysis: Thailand’s proposed land bridge project easier than Kra Canal idea, but steep challenges await
The land bridge project is designed to provide a new trade route between the Indian and Pacific Oceans, potentially bypassing the Malacca Straits, by linking two deep sea ports on Thailand’s eastern and western coasts via a rail and road system.
The landscape of Thailand's Kra Isthmus. (Photo: iStock/boonsom)
20 Oct 2023 09:20PM(Updated: 21 Oct 2023 09:43PM)
BANGKOK: Thailand's plan to build a 90km land bridge across its southern region, which could see shipping trade bypass Malaysia and Singapore, is on paper easier than the long-touted Kra Canal, although it still faces steep challenges, say analysts.
These include the multi-billion dollar construction cost, security concerns in Thailand’s conflict-ridden south and the mountainous terrain where the project would prospectively be located.
Given the long-established shipping facilities and operations in the Straits of Malacca, analysts also warned that the Thai land bridge initiative could end in failure if not carefully planned.
But for Thai Prime Minister Srettha Thavisin, the project is expected to attract international investors and turn Thailand into a thriving production hub.
“This will be a global mega-project, which will shorten the duration of goods transport via the channel of the Malacca Strait by six to nine days,” he said during the Thailand-China Investment Forum in Beijing on Thursday (Oct 19).
Mr Srettha also added that Thailand is ready to welcome Chinese investors to help develop the country and promised to improve the ease of doing business in the kingdom in the future.
A NEW TRADE ROUTE LINKING THE INDIAN AND PACIFIC OCEANS
The land bridge project is designed to provide a new trade route between the Indian and Pacific Oceans. It will include two deep sea ports on Thailand’s eastern and western coasts as well as a rail and road system linking them together.
The eastern port will be located in Chumphon province on the Gulf of Thailand and the other in Ranong province on the Andaman Sea. According to Mr Srettha, the cost is estimated at US$35.6 billion.
Assoc Prof Antonio L Rappa from the School of Business at the Singapore University of Social Sciences described the venture as “simply too costly” and cautioned that the separatist movement in Thailand’s restive south as well as the mountainous terrain of the project location could affect the construction.
However, if it is successfully developed, Dr Rappa told CNA “it will significantly affect Singapore at least 50 years from now”.
The land bridge project was also studied during the previous government of Gen Prayut Chan-o-cha, who wished to expand Thailand's transport infrastructure and transform the country into a logistics hub of Asia.
THE LAND BRIDGE AND ITS PREDECESSOR KRA CANAL
The idea of creating a new maritime route by connecting the Gulf of Thailand with the Andaman Sea is nothing new.
Historical evidence shows the concept dates back to the 17th century, when the excavation of the Kra Isthmus – the narrowest part of the Malay Peninsula in Ranong and Chumphon – was explored.
For decades, various governments have attempted and failed to dig the so-called Kra Canal.
According to Dr Yuttaporn Issarachai, a political scientist from Sukhothai Thammathirat Open University, the proposed excavation has been hindered by domestic politics and concerns about its impact on the environment as well as internal security.
Although the land bridge project does not involve a canal, he said it is a relatively similar idea and could face a lot of challenges, including geopolitical conflicts.
He pointed out how maritime territorial spats involve several countries such as China, Vietnam and the Philippines, and by building a new maritime passage way located near the disputed area, Thailand could be affected.
“It won’t be easy,” Dr Yuttaporn told CNA. “It could push Thailand into territorial disputes in the South China Sea. We can’t forget that maritime shipping routes involve tremendous economic profits and political stability in the region.”
However, Dr Mohd Hazmi Mohd Rusli from the Universiti Sains Islam Malaysia’s Faculty of Syariah and Law said the land bridge project could take off “if China as the main stakeholder is adamant to invest”.
A land bridge, he added, would be more feasible than a canal as it would not involve digging through the Kra Isthmus.
“The Panama or the Suez Canal… can shave off thousands of miles of voyage. However, the proposed Thai Canal (Kra Canal) could only shave off hundreds of miles,” he said.
UNLIKELY IMPACT ON SINGAPORE
The first phase of the land bridge project is expected to finish in 2030, with the final completion targeted in 2039.
Comparing it to the proposed Kra Canal excavation, Dr Yuttaporn said the land bridge should reduce the public concern about separatist activities in southern Thailand.
“When we talk about the canal, people fear it would split Thailand into two parts, which could fuel the separatist movement in the restive south,” he explained.
“But this is a land bridge. They won’t dig a canal but build a superhighway across, that’s all.”
On Thursday, Interior Minister Anutin Charnvirakul expressed his support for the project, saying constructing it is easier than excavating the Kra Canal, according to local media reports.
He reportedly affirmed the project will not affect internal security because instead of splitting the land, the land bridge will link two coasts together.
However, analysts say whether shipping companies would opt to use the land bridge is another question. This is because ships would have to dock at either Ranong or Chumphon port and have their cargoes transported on land between them, which meant possibly more time and higher costs.
Dr Rusli believes Thailand will have to equip its ports on both coasts with adequate facilities in order to attract potential users, as most ships would prefer using the conventional Straits of Malacca and Singapore route.
“The Straits of Malacca and Singapore route is equipped with adequate shipping facilities and mariners are used to using this route.
“Without careful planning and preparation, this (land bridge project idea) would end up becoming the defunct Yan-Bachok Pipeline Project mooted not too long ago," said Dr Rusli, referring to a 310-km pipeline proposed by Malaysia since as early as 2007 to transport oil from the coastal city of Yan in Kedah to Bachok in Kelantan and out to the South China Sea.
Source: CNA/ya/pp
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