Thailand is proposing a massive project aimed at reducing shipping times between the Indian and Pacific oceans by bypassing the congested Malacca Strait. Prime Minister Srettha Thavisin announced the project during a meeting with investors in San Francisco, stating that it could shorten travel time by an average of four days and lower shipping costs by 15%. The new project aims to address the projected increase in traffic volumes, which are expected to surpass the capacity of the Malacca Strait by 2030.
Dubbed the Landbridge project, it is estimated to cost around $28 billion (1 trillion baht). The plan involves constructing seaports on both sides of Thailand’s southern peninsula and connecting them with highway and rail networks. This 100-kilometer (62-mile) connection will replace a previous Thai proposal to dredge a canal through the Kra Isthmus.
The Malacca Strait, situated between Malaysia and Singapore, is currently the shortest sea route linking the Asia-Pacific region to India and the Middle East. Approximately a quarter of the world’s traded goods pass through this strait, and with its increasing congestion, shipping costs are expected to rise. Srettha highlighted that on average, more than 60 maritime accidents occur in the passage each year.
Srettha emphasized that the Landbridge project will serve as an important alternative route to alleviate the issues in the Malacca Strait. He stated, “This will be a cheaper, faster, and safer route.” The western port will have the capacity to handle 19.4 million ton equivalent units, while the eastern port is designed for 13.8 million TEUs, collectively accounting for about 23% of the cargo at the Port of Malacca.
The prime minister has already presented the project to investors in China and Saudi Arabia, and he believes it will create 280,000 jobs and boost Thailand’s annual economic growth rate to 5.5% once fully implemented. Thailand’s economy, the second-largest in Southeast Asia, grew by 2.6% last year and is projected to expand by 2.5%-3% in 2023.
Thailand aims to complete the Landbridge project by 2030 and is open to foreign investors owning more than 50% in joint ventures with local companies for the construction of ports and related infrastructure. The Office of Transport and Traffic Policy and Planning estimates that the deep sea ports in Ranong and Chumphon will cost 630 billion baht.
Prime Minister Srettha expressed that the Landbridge project presents an unprecedented opportunity for investment, linking the Pacific Ocean and the Indian Ocean and connecting people from the East to the West. During the Asia-Pacific Economic Cooperation summit, Thai officials will conduct a presentation for prospective US investors. Companies such as SSA Marine Inc., Port of Long Beach, Oracle Corp., and Webtec have shown interest in the project.
For years, Thailand had considered a canal project that would reduce travel distance by 1,200 kilometers at the narrowest point of the country. However, this proposal was dismissed multiple times due to environmental concerns.
The timeline for the Landbridge project is yet to be determined.
