Thailand Proposes Sea Route to bypass busy Malacca Straits

Thailand has proposed a Multibillion-dollar project that will significantly cut shipping times between the Indian and Pacific oceans by bypassing the Malacca Strait — one of theWorld’s busiest sea lanes.

Prime Minister SretthaThavisin told investors in San Francisco on November 14th that the project can cut travel time by an average of four days and lower shipping costs by 15 per cent. With traffic volumes projected to exceed the Malacca Strait’s capacity by 2030, the new project will ensure seamless flow of goods, he said.

The Land bridge project will cost about 28 billion US dollars, with seaports to be built on either side of the country’s southern peninsula and linked by highway and rail networks, according to the government. The 100-kilometer (62-mile) connection would replace a decades-old Thai proposal to dredge a canal through the Kra Isthmus. Thailand had for decades discussed an idea for a canal that would traverse the nation’s narrowest point and trim the travel distance by 1,200 kilometers, but that proposal was dismissed several times on environmental concerns.

The Port on the West will have capacity to handle 19.4 million ton equivalent units, while the Eastern one is designed for 13.8 million TEUs, together accounting for about 23 per cent of the Port of Malacca’s total cargo, he said. The Land bridge will be an additional important route to support transportation and an important option for resolving the problems of the Malacca Strait,” Srettha said. “This will be a cheaper, faster and safer route.”The Malacca Strait — a narrow sea lane between Malaysia and Singapore — is the shortest sea route linking the Asia-Pacific region to India and the Middle East. About a quarter of the world’s traded goods pass through the strait and it will only become busier, pushing up shipping costs, Srettha said, noting that there are more than 60 maritime accidents a year on average in the passage.

Thailand aims to complete the project by 2030 and foreign investors will be allowed to own more than 50 per cent in joint ventures with local companies in building the ports and related infrastructure. The Land bridge “presents an unprecedented opportunity to invest in this commercially and strategically important project that connects the Pacific Ocean and the Indian Ocean, connecting people in the East with the West,” he said.

Thai officials will hold a presentation for prospective US investors during the Asia-Pacific Economic Cooperation summit this week. US firms interested in the project include SSA Marine Inc., Port of Long Beach, Oracle Corp. and Webtec, Srettha said.