Wednesday, April 24, 2024
HomethailandgeneralBridging the gap

Bridging the gap

Among the many large economic projects promised by past governments that were never developed, the southern land bridge stands out, in part because it was approved in 1989 as a strategic part of the Southern Economic Corridor.

Some administrations tried to dust off this enormous project, with a recent attempt occurring during the Prayut Chan-o-cha government, when the Office of Transport and Traffic Policy and Planning finished the project study last year.

The project is expected to enhance infrastructure to support trade, investment and transport.

RETRYING A RETREAD

Three developments — a highway and motorway cutting across the land to connect Ranong on the Andaman coast and Chumphon on the Gulf of Thailand, deep-water ports in those two provinces, and a 120-kilometre double-track railway — were discussed again when Prime Minister Srettha Thavisin showcased this project to railway operators and potential investors in China and Saudi Arabia during his official visits earlier this month.

However, the land bridge project has been criticised since the it was first floated, as the price tag for the scheme could possibly reach a trillion baht.

Other critical concerns are the environmental and social impacts that might occur related to the construction and economic activities that would follow.

According to the final report by the Office of the National Economic and Social Development Council and Chulalongkorn University issued in November last year, the most appropriate way of connecting transport routes between the Andaman and the Gulf of Thailand coasts would be to rely on developing rural areas and minor investment.

Instead of investing in new infrastructure, the report suggested utilising and building on the existing Southern Economic Corridor development plan, as the conceptual framework was approved by the government in 2018.

The study advised the corridor development would help lower inequality in southern Thailand as the prosperity of this region lags the central and eastern portions of the country.

However, the prime minister has promoted a version of the land bridge project on several occasions recently, with businesses watching the response to see if anything comes of it.

The Federation of Thai Industries (FTI) believes the decades-old proposal to build a transport link between the two coasts should make some progress during the Srettha government tenure as it could be a new selling point to attract investment without requiring digging a new canal to connect the coasts, which is the main point that draws fierce opposition.

The project is expected to enhance infrastructure to support trade, investment and transport.

LESS CONTROVERSY

Kriengkrai Thiennukul, chairman of the FTI, said he believes the proposed land bridge was never completed because it sparked concerns over national security.

The current version termed a “land bridge” being pushed by the government has nothing to do with the highly contentious proposal to dig a canal in the Kra Isthmus of Thailand.

Officials prefer connecting the two coasts with a land transport system and, according to Mr Srettha, an oil pipeline.

“Mr Srettha recently visited China and Saudi Arabia. Among his objectives was to encourage investors from the two countries to invest in the land bridge project,” said Mr Kriengkrai.

“China and Saudi Arabia are interested in this project. Other countries, especially the US, are also keen to consider this investment opportunity.”

Saudi Arabia wants to invest in the project to open a new transport channel to supply oil to China, he said.

If the project is a success, it would provide a boost to the economy similar to the touted Eastern Economic Corridor, which is being developed into Thailand’s high-tech industrial hub in parts of Chon Buri, Rayong and Chachoengsao provinces.

The project is expected to connect Ranong on the Andaman Sea to Chumphon on the Gulf of Thailand.

This link could provide a new trade route for shipping, serving as an alternative to the existing route from the Indian Ocean to the Pacific Ocean through the Strait of Malacca.

Roughly 85,000 ships pass through the strait annually, with the figure expected to increase to 128,000 in a decade, according to the Industrial Estate Authority of Thailand.

Previous versions of a land bridge caused concern among local communities regarding the impact to their way of life and the environment, but developers feel this reworked scheme could offer higher wages for residents.

CONNECTING ECONOMIES

Kobsak Pootrakool, director and senior executive vice-president at Bangkok Bank and a former member of the Prime Minister’s Office in the Prayut government, said this project would strengthen Thailand’s competitiveness and elevate economic growth in the long term.

Mr Kobsak said he supports building a shipping port in Ranong province to bolster trade with India, Bangladesh, Africa and the Middle East.

Given the high growth potential of the Indian economy and positive trends for Africa’s economy, with a combined population for the two regions of 2-3 billion, Thailand could connect cargo shipping with the potential markets on the Andaman coast, he said.

“If Thailand can connect shipments with India and Africa via a western shipping port, it would benefit the country’s economy for the next 30-40 years given the growth trends for the Indian and African economies,” Mr Kobsak said.

Thailand already has Laem Chabang port to support shipments to Japan, South Korea, China, Taiwan and Hong Kong, he said.

If a new port is developed on the Andaman coast, it could connect with Laem Chabang port via railway projects approved by the former cabinet, said Mr Kobsak.

The project has high investment costs and environmental concerns, meaning a thorough feasibility study is required before it can go ahead.

It would be better if the project was invested in phase by phase, starting with a port in Ranong, he said.

If the new port has demand and performs well, other parts of the project should be developed, Mr Kobsak said.

A group of people affected by the Chumphon-Ranong land bridge submitted a letter to the parliament and Ministry of Transport to counter the mega project on September 23, 2023. Nutthawat Wichieanbut

IMPACT ON TOURISM

Ratchaporn Poolsawadee, president of the Tourism Association of Koh Samui, said while the government has good intentions with this project to increase competitiveness in the region, it could harm the abundant natural resources in the areas being studied.

He encouraged the government to study the environmental impact thoroughly before making a decision.

Mr Ratchaporn said the government should carefully weigh the possible economic gain from this project with its consequences, especially for tourism.

“Tourism has been a major income provider for people across nearby islands such as Koh Samui, Koh Phangan and Koh Tao,” he said.

“The revenue generated goes to the local community. Each year these areas earn more than 100 billion baht in revenue from tourism.”

Mr Ratchaporn said he is concerned about the effects of excess shipping in the area, as well as oil spills in the sea, which harm sea animals and seafood production as well as cause coastal erosion.

He said the government should prioritise understanding the environmental impact assessment and learn from case studies such as the impacts from the Panama Canal and Suez Canal.

For instance, shipping routes should be navigated in a way that steers clear of nearby natural parks and tourism islands, such as Koh Tao, which is a popular spot for scuba diving and coral reefs, said Mr Ratchaporn.

The government needs to communicate more about the project’s benefits and consequences for locals in the affected areas, he said.

The proposal would disrupt the typical shipping routes through the Malacca Strait, meaning stakeholders who normally benefit from that passage might impose trade barriers against Thailand, which the government should consider, said Mr Ratchaporn.

In terms of advantages, he said the proposal could increase the number of investors and tourists with new transport options, connecting other provinces apart from those along the Andaman and Gulf of Thailand coasts.

MORE CLARITY NEEDED

Sanan Angubolkul, chairman of the Thai Chamber of Commerce, said the private sector believes prioritising large-scale infrastructure investments such as the land bridge project would benefit the long-term economic growth of Thailand.

“The private sector has been monitoring positive responses from foreign investors since the visit to Saudi Arabia. Both the Saudi government and private sector indicated they see the project as an opportunity to invest in energy infrastructure,” he said.

“This includes the construction of pipelines to transport oil and gas from one coast to the other, as well as establishing storage facilities for oil, making it an oil transport routes from Saudi Arabia to Thailand and the Asean region.”

Mr Sanan said there is also an opportunity for Thai agricultural and livestock products, including cereals, soybeans and beef, to be exported to Saudi Arabia and the Middle East, as these regions have a high demand for food.

This could expand the market and income for Thai agricultural producers, he said.

According to Mr Sanan, if the project is successfully implemented, it would enhance the infrastructure that supports trade, investment and transport.

He said the chamber is reserving judgement on this project, awaiting a comprehensive study and review of critical factors for the scheme, such as transport duration, cargo volume, transport costs, and mode of transport linking the two coasts to maximise economic development in the future.

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