Thailand revives $30 billion coast-to-coast highway to rival Malacca Strait

Chaiyaporn?Arunrasamee, hunched with his nets over the Andaman Sea, is a Thai government official proposing a "Land Bridge", which will ferry goods from ports on either side of the peninsula.

Chaiyaporn stated that he did not want the project to be implemented. The Thai Prime Minister Anutin Charnvirakul revived the project after the war with Iran and the closing of the Hormuz Strait revealed the countries' dependence on strategic maritime chokepoints.

Plans envisage a '1 trillion baht logistics corridor ($30.45billion) to provide an alternative route through the Strait of Malacca, which is currently clogged with traffic. The corridor will connect two new deep sea ports, Chumphon on the Gulf of Thailand in the east, and Ranong along the western Andaman Coast, where Chaiyaporn has been fishing for 50 years.

He said, "This will be in the area that we live in," last month on the island of Baan Hat Sai Dam. "Where will you go?"

We crisscrossed land and communities along the proposed Land Bridge route and interviewed over 15 residents, local officials and experts, as well as planning leaders, and other people involved in or affected by the project.

The interviews and documents that we reviewed reveal previously unknown details about a project which promised savings and quick shipments but was hampered due to complicated logistics, opposition from locals and an enormous cost.

Analysts claim that the project appears to be economically ambitious, and it is unlikely to compete against Malacca in terms of a global transport route. However, it could be viable as a "smaller-scale strategic pathway for Thailand."

The Malacca Strait, which is 900 km (550 miles) long, connects East Asia with the Middle East, Europe, and Thailand.

Eugene Mark, ISEAS-Yusof Ishak Institute in Singapore, said that the land bridge could eventually...emerge into a modular asset for national security aimed at securing Thailand's local energy routes as well as boosting its own western export capability.

Alternatives to Malacca

A presentation by the government, seen by, says that the proposed corridor would reduce logistics costs of nearly 30% and transit times up to 14 days between ports on the Indian Ocean in South Asia and the Middle East.

The presentation states that the standard gauge railway will span 90 km (56 mi) between two deep-sea port, and be able to handle up to 20 millions Twenty-foot Equivalent Units (TEUs) per year.

One TEU is the volume of one standard 20-foot shipping box.

A second meter-gauge line will connect the cargo flow to the national railway network. The corridor will also be supported by local roads and multi-lane highways, which are all integrated into Thailand's wider transport network.

Thai estimates claim that 80% of the container traffic at regional ports in the Malacca Strait region, including Singapore, is trans-shipment cargo. This is goods waiting to be transferred from one vessel to another, rather than goods for local markets.

Jiraroth Sukkorrat, Director General of Thailand's Office of Transport and Traffic Policy and Planning said, "We would like to capture some of the 80% market in particular, especially feeder segment." He was referring to cargo ships that have a capacity of 12,000 TEU or less.

According to an internal government presentation, overall, feeder-tofeeder cargo movement from the Gulf of Thailand into the Andaman sea - or vice-versa - can be 10% cheaper and six-days faster than similar routes through Singapore. This is mainly due to lower congestion.

Jiraroth stated that "we are not targeting the giant mainline ships."

DIPLOMATIC BALANCING ACT

The findings of a panel appointed by the Thai government, which is currently reviewing projects and previous impact assessments reports, are due before the end July.

The Land Bridge Plan, which was first proposed around 2020, is the successor to a number of infrastructure schemes pursued over 20 years by Thai governments, but failed to materialise because of shifting policies and a lack of investment support.

The current version of the plan does not include petrochemical plants and oil refineries. Instead, it focuses on ports, railways, and light industries.

The concept hasn't changed. Wipawadee panyangnoi is an independent researcher and doctoral candidate who has written her dissertation on the Land Bridge concept.

In the past, they talked openly about industrial estates and petroleum chemicals. People were against them. The project is now framed in terms of transport infrastructure and logistic because the public is more accepting.

Mark, of the ISEAS Yusof Ishak Institute, says that it is a difficult task to convince cargo liners of the financial and time cost of unloading goods, transporting them overland and reloading onto another vessel.

"Proving this model of double-handling can compete with the seamless transit of the Strait of?Malacca is a major obstacle," he said.

Jiraroth said that authorities had learned from past failures and will now play a supportive and regulatory role. The state's primary funding source is private investors.

He said that the consortium must include shipping lines, port operators and financiers, as well as land developers.

Mark stated that investor interest is currently cautious and non-committal, due to the shifting policy frameworks as well as the enormous capital requirements.

He said that the project is also in a geopolitical bind, as neighbours watch with caution and suspicion.

Mark said that "Chinese state-owned enterprises are unlikely commit significant capital until they have strong operational leverage. This would lead to intense political resistance in Thailand?over foreign control."

"Thailand needs to perform a delicate diplomatic balance act in order to avoid the corridor becoming a geopolitical hotspot."

Singapore's foreign ministry has not responded to comments immediately.

EXPANDING RESISTENCY

Chaiyaporn was one of a dozen residents who told the?news that they were against the plan. The 90-kilometer (56-miles) corridor would disrupt fishing and farming communities along this area. Some residents in the Phato district in the middle of a 'proposed landbridge corridor,' where durian and coffee plantations bring in substantial incomes, question the need for such industrialisation.

Chalermchart Sekhiao (30), a coffee entrepreneur, said that the durian industry in his hometown generates 10 billion baht per year.

People need to realize that this is not a barren wasteland.

This month, the project was dealt a major blow when the regulators ordered an entirely new Environmental and Health Impact Assessment due to a huge discrepancy in the estimates of government and private researchers on the density and diversity of marine life around the proposed ports.

Mark explained that "Local resistance alone rarely cancels top-down megaprojects in Thailand but it acts as an effective regulatory drag which compounds investor risks."

(source: Reuters)