Who needs this landbridge?
A road and rail project in southern Thailand. The Thai government is working on firming up a rebooted landbridge project across the southern part of the country. ITJ correspondent Michael Mackey has termed this a “bold, back-to-the-future” move. The government is looking at new road and rail links between the eastern port of Chumphon and the western hub of Ranong.
The idea is old, but there’s a significant difference this time. There’s now a government policy in place for the project, supported and promoted by Thailand’s prime minister Srettha Thavisin (who was also finance minister until April this year). This will be needed, as responses to the huge building programme and massive political and economic challenges range from indifferent to hostile. On top of this the price tag is estimated at a daunting USD 29 billion.
The plan is made up of three parts. It will require deepsea ports in both cities of Chumphon and Ranong, roads and motorways stretching across the entire 90 km of southern Thailand’s Kra Isthmus, with service roads on either side in certain areas and new dual-carriage railway lines alongside. Four tunnels will be drilled, two each for trains and road vehicles.
Civil engineer and finance politician
The landbridge will be the basis of a ‘Southern Economic Corridor’ as well as a key part of Thailand’s aspirations to become a global transport hub. The plan is to start construction in 2025 and to open the route for business in 2030 – which represents an incredibly tight timescale for such a huge project.
The logic behind it is clear and pressing, however. In a statement made at a ‘Thailand Landbridge’ road show in San Francisco CA (USA) last year Thavisin, who also holds a degree in civil engineering, pointed out that “we face a huge risk if we rely solely on the Strait of Malacca for traffic between the Indian and Pacific Oceans.”
Earlier this year he signalled his support for the plan and explained its need by elaborating that a quarter of the world’s trade passes through the Strait of Malacca and more than 70% of all oil exported from the Middle East is transported through said passage, making it the most congested bottleneck for shipping in the world.
“Around 90,000 vessels pass through the strait every year”, the prime minister continued, “and this figure increases by more than 2% every year. This means the channel is expected to exceed its capacity by 2030. If it becomes even more congested, serious economic consequences are likely.”
What is interesting is the depth and detail of his case and the overall scale of the plan. “The Strait of Malacca is long and narrow,” he pointed out, “especially the Philips Channel, where it is a mere 2.8 km wide.
Vessels thus have to queue there and move very slowly.” More than 60 marine accidents occur in the strait every year, involving a variety of vessels, from local craft to large oil tankers. Ship are additionally vulnerable to piracy as well as unfavourable weather conditions.
Thavisin added that “this is why we expect shipping through the Strait of Malacca to face more extensive problems in the future, including increasing transit times and higher costs. This is because vessels that have to wait several days incur significant opportunity costs as well as other outlays, due for example to the spoilage of goods during delays.”
Regional benefits – and opposition
Comparing the costs and transit times of the potential new landbridge with the Strait of Malacca has identified the potential target group for the landbridge as feeder vessels. “Cargo from China and European countries transported by liner vessels can be distributed by feeder ships in this area, and save at least 4% on costs and five days of time,” according to the prime minister.
Analysts expect total cargo volumes at the western port of Ranong to come to approximately 19.4 million teu, and those at the eastern gateway of Chumphon to amount to approximately 13.8 million teu. This represents approximately 23% of the strait’s total cargo volume. A previous plan had envisaged that each port would cater to 20 million teu of cargo, suggesting either a much greater scope – or a misjudgement of the reality.
Thavisin is convinced that “this project will cement Thailand’s role as a hub for transport and commerce, and thus simultaneously provide the country with a more significant strategic importance as a major connecting point between east and west.”
Against this are some concerns, however. Costs figure highly therein, with a key part of that concerning China’s ‘One Belt, One Road’ initiative (Obor). Neighbouring Laos has a high-speed rail link as a part of Obor, but is hugely in debt to China as a result. Thailand is much more cautious about entering into any similar agreement.
Thailand has a history of infrastructure projects that have failed, as Bangkok’s skyline testifies. Some sources in the industry addressed concerns that the project represents a supply-driven undertaking that may not fit today’s fast-changing world.