Friday, March 23 2018 | ASIA TODAY INTERNATIONAL - Reporting the Business that Matters in Asia
The Thai Canal: A Vision or Mirage?
The Thai (Kra) Canal may not yet be an idea whose time has come, but it does appear to be on the horizon . . .
BANGKOK - It’s been called ‘the longest delayed infrastructure project in history’.
The idea to build a canal across Thailand’s southern peninsula to connect the Indian and Pacific Oceans was first proposed during the mid-1600s when Thailand was a small trading empire known as the Kingdom of Ayutthaya.
But the King of Ayutthaya possessed neither the finances nor the technology to turn the idea into reality. Times have changed.
In mid-September, a bid to galvanise support for the canal took place at a one-day seminar in Bangkok organised by the leading research institution, the King Mongkut Institute of Technology, and the Thai Canal Association for Study and Development, a recently-founded group of local influential figures including retired Generals, statesmen and politicians.
The Association has rebranded a project that for centuries has been known as the Kra Canal (after the isthmus where it would be located) as the Thai Canal.
Significantly, participation at the seminar wasn’t limited to local advocates.
A slew of foreign diplomats were in attendance, while experts from the United Nations, the European Association for Business and Commerce, Japan and China presented analyses on the challenges and benefits of building the canal.
Nut organizers were unable to draw anyone from the Thai Government to deliver an opening or keynote speech, and this was interpreted as a sign of reluctance on the part of the current Administration to support the venture.
In fact, Prime Minister Prayut Chan-o-cha said in January 2016 that canal proponents would have to “push forward the project in the next Government. I won’t do it now because I have a pile of urgent work to finish”.
For a Government that has been struggling to raise GDP and export growth, a massive trade-promoting infrastructure project such as the canal would theoretically be attractive, but Prayut’s pile already includes high-speed rail lines and other infrastructure worth tens of billions of dollars, in addition to the Eastern Economic Corridor, a development zone to showcase a transition to advanced industries.
Elections for a new Government may take place near the end of 2018, but no date has been officially set.
Canal advocates remain undaunted by Government indecision. They say all they are asking for from the current Administration is funding and support for a feasibility study to determine what the canal will cost - and whether or not it will bring the benefits claimed. And if they have to wait until the next Government to actually start building, they are fine with that.
“As the development of the Kra Canal is of great significance to Thailand, it is recommended that relevant departments in Thailand start the feasibility study as soon as possible,’’ said one conference speaker, Prof Zhou Dawei of Beijing University. Others at the conference said the Chinese Government has to remain circumspect out of respect for Thai sovereignty, but would like to see the canal built.
The study proposed would be crucial to clearing up many questions and controversies.
Estimates vary widely on the cost of the canal, how much transport time it would save ships, how many ships it could handle and what the impact on both the Thai and regional economies would be.
Price tags for the canal range from about US$28 billion to US$$55 billion.
Canal sceptic, Rear Admiral Chatuporn Sookchaloem, disputes many of the statistics put forward by canal advocates.
“The truth is that many people misunderstand basic facts about marine administration,’’ he says.
Estimates that the canal would save ships three days by not having to sail another 1,200 km around Singapore through the Malacca Straits are overblown, he claims, insisting it would save ships about 15 hours at most. And the canal would be capable of handling less than a third of the 600 ships per day proponents are touting.
But Pakdee Tanapura, Chairman of the Thai Canal Association, may have a persuasive argument for the canal, even if some of its benefits have been overstated.
He cites a study by the Marine Institute of Malaysia that puts the capacity of the Malacca Straits at 122,000 ships per year - and a World Bank estimate that that figure will be exceeded by the year 2020. The Thai Canal, therefore, would become a necessity to alleviate congestion in the narrow and pirate-infested Straits.
Extrapolating from that, the Thai Canal would not be viewed as an economic or trade threat by either Malaysia or Singapore, but a regional trade booster that would multiply growth throughout the entire Southeast Asian region, he said.
“The Malacca Straits are very narrow, shallow and have several accidents every year, which is a sign of congestion,’’ said Prof Harald Wagner of the King Mongkut Institute of Technology.
“Everyone looks at the map and can clearly see a 1,200-km shortcut with a Thai Canal.”
But are they seeing a vision, or a mirage? Only a feasibility study will answer that.
Nonetheless, the Bangkok seminar clearly demonstrated that interest and support for the canal is growing, not just in Thailand, but internationally and especially among some circles in China.
The Thai Canal may not yet be an idea whose time has come, but it does appear to be on the horizon.
* Robert Horn is Bangkok correspondent for ATI Magazine.