Thailand Pitches Ambitious USD 28 Billion Malacca Strait Bypass Project To U.S

Thai PM Srettha Thavisin has told investors in San Francisco that the assignment can cut travel time by an average of four days and lower shipping costs by about 15%. He said that with traffic volumes expected to exceed the Melaka Strait’s capacity by 2030, the new project will ensure an easy flow of goods.

The so-called Landbridge assignment will cost approximately 1 trillion baht, with seaports to be built on either side of the nation’s southern peninsula and connected by highway and rail networks, per the government.

The 100 km connection would replace a decade-old Thai proposal for dredging a canal via the Kra Isthmus.

The Melaka Strait – a narrow sea lane between Singapore and Malaysia – is currently the shortest sea channel that links the Asia-Pacific to India and the Middle East.

Nearly a quarter of the world’s traded goods pass via the strait. It is expected to become busier, pushing up shipping costs, Srettha mentioned, noting that there are over 60 maritime accidents each year on average in this passage.

The Landbridge will be an additional crucial channel for supporting transportation and an essential option for resolving the issues of the Melaka Strait, Srettha mentioned. This will be a faster, cheaper, and also a safer channel.

The port situated on the west will have a capacity of 19.4 million ton equivalent units, as the port on the east will have a capacity of 13.8 million TEUs, accounting for around 23% of total cargo at the Port of Malacca, he said.

Srettha claims that when wholly executed, the initiative, which he has also presented to investors in China and Saudi Arabia in the past few weeks, is expected to create 280,000 jobs and boost Thailand’s yearly economic growth pace to 5.5%. The second-largest economy in Southeast Asia increased 2.6% last year and is expected to grow 2.5%-3% in 2023.

Thailand intends to complete the project by 2030, and foreign investors will be allowed to possess more than 50% of partnerships with local companies to construct ports and associated infrastructure.

A report from the Office of Transport and Traffic Policy and Planning states that deep sea ports along Ranong, based in the Andaman Coast and Chumphon in the Gulf of Thailand, might cost 630 billion baht.

The Landbridge represents an unparalleled chance to invest in this commercial and strategic project that unites the Pacific and Indian oceans, linking individuals across the East and West.

During this week’s Asia-Pacific Economic Cooperation meeting, Thai authorities will make a pitch to possible US investors. SSA Marine Inc., Oracle Corp., Port of Long Beach, and Webtec are among the US companies interested in the project, according to Srettha.

Thailand had debated a canal that would span the country’s narrowest point and cut travel distance by about 1,200 kilometres for decades. Still, the concept was repeatedly rejected due to environmental concerns.

Reference: Reuters

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Source: Maritime Shipping News