Thailand Drums up Investment for Strategic ‘Landbridge’

BANGKOK — Thailand is trying to drum up investment for a "landbridge" across its southern neck, which would cut cargo transit times from the Pacific to Indian oceans and boost the kingdom’s strategic importance by providing an alternative route for Chinese trade that could bypass Singapore and the Straits of Malacca.

Critics, though, are questioning the wisdom of the $28 billion plan, which so far has received no formal comment from China. Beijing has historically preferred the idea of a deep-water, Suez Canal-style route across Thailand for its ships.

"China is a strategist. It won’t give away its position that easily until it sees the other investors," said Chulalongkorn University professor Sompong Putivisutisak, who has studied the landbridge extensively.

But there are "two reasons that China would invest," he told VOA. "First, financial benefits, secondly geopolitics. Financially, this project is not worth the investment, but geopolitically it could be interesting as China would have control over both seas.

"It’s a matter of how badly it wants that access to both seas," he said. 

The landbridge proposal, already touted in Beijing and San Francisco by Thai premier Srettha Thavisin, envisages cargo ships dropping containers at ports on either side of the proposed nearly 90-kilometer road and rail route.

Under the plan, road and high-speed rail would cut across southern Thailand from Chumpon province on the Gulf of Thailand to Ranong on the Indian Ocean, to be loaded onto waiting ships.

If a feasibility study currently underway is given a green light, work is due to start in 2030.

Thailand says it is open to interest from all investors, including those dependent on Middle Eastern oil, which currently passes through the Straits of Malacca to reach China and East Asia, with consumer goods flowing the other way.

The Bangkok Post and Deutsche Welle have reported potential interest from Germany.  Following a recent trip to Japan, where Thailand’s premier spoke with Japanese businesses and politicians about the plan, he said – without elaborating – that there was interest in the project.

The landbridge would "connect the Pacific Ocean and the Indian Ocean without requiring ships to sail down along the tip of Singapore, known to experience congestion and would cut transport duration," Srettha told the APEC CEO summit Nov. 15 in San Francisco, saying it is a "very important project, not just for Thailand, but also for the world."

Thai transport minister Suriya Juangroongruangkit has said that more than 10 American companies expressed interest, including e-commerce giant Amazon, although no concrete investors have been yet named.

Thailand wants to become a hub for Asia’s logistics. To do so, it needs to offer shorter transit times than Singapore, home to the world’s busiest transshipment port. Getting U.S. buy-in is also important, analysts say, if Thailand is to avoid having to offer overly favorable terms to Chinese companies to fund, build and use the new route.

"If China indeed supports and invests in the landbridge, China can gain more economic presence in southern Thailand -- and this will benefit the Chinese side in the competition with the U.S," Termsak Chalermpalanupap, visiting fellow and coordinator of the Thailand Studies Program at Singapore’s ISEAS-Yusof Ishak Institute said.

"This is why PM Srettha is also trying to sell [it] in San Francisco recently," he said in an emailed reply.

Canal dreams over

The landbridge idea appears to finally put an end to aspirations for the so-called Kra Canal, a generations-old vision to dig a deep waterway across southern Thailand - similar to the Suez Canal - to allow large ships to pass, cutting at least a day off of sailing time around the Straits of Malacca.

That concept has been pushed by Chinese lobbying groups in Thailand for years, but has never taken off because of cost, potential environmental damage and the physical division of the country it would bring.

After a 2014 coup, then-army chief Prayuth Chan-ocha set up a so-called Thai-China Strategy Research Center to study the feasibility of Kra Canal. This center is also backed by a Chinese holding limited company registered in Thailand.

Instead, Thai authorities say the land route could be plugged into high-speed rail routes under construction in Thailand to Singapore as part of Beijing’s Belt and Road Initiative.

Srettha attended a BRI forum in Beijing in October and drew a rough map of the route during a meeting, which he posted online. A Thai government spokesperson said China Harbour Engineering Co., China’s largest infrastructure developer, expressed interest in the project.

The company already has port and dredging contracts in the country, according to its website.

Crucially, the landbridge could give China an alternative route for cargo if its ships could not use the Straits, an extremely busy, but narrow, shipping lane through Singaporean, Malaysian and Indonesian waters, because of conflict or geopolitical tensions, most likely with the United States.

In Thailand, critics say it will cost too much and is unlikely to win China’s full backing, as it falls short of being a canal with the potential for moving cargo and naval ships into the Indian Ocean.

"It’s nothing short of another dreamy project," Somboon Kamhang, chairman of the Coordinating Committee on Development, an organization backing community development that has long studied plans for trade routes through the south.

"China isn’t interested in the landbridge project. Building a landbridge is just way too costly and time-consuming, but China can get behind the canal idea which could give it more control over the region," he told VOA.

There is also a domestic political purpose behind making Thailand a logistics hub, as it was a key pillar of a 20-year development strategy enacted by Prayuth’s administration, some of whose key allies remain in Srettha’s government.

In the rush to sell Thailand’s connectivity, critics say Thailand may end up with an expensive white elephant scheme, pleasing neither China nor the United States.

"Thailand needs to be able to read the game, otherwise it’s setting itself up for failure," Somboon said.