Land Bridge Project Moves From ‘An Impossibility’ To ‘A Possibility With Challenges’?
Land Bridge project feasibility study passed the vote in parliament last week with 269 lawmakers voting in favor and 147 against the project moving the project from ‘ An Impossibility’ to ‘A Possibility With Challenges’.
Land Bridge is a revisited project and an adaptation of the centuries old Kra canal project, which was to dig a canal across the Isthmus of Kra between Chumphon and Ranong.
However, because the canal would physically separate the country into two, it was always shelved due to national security and several other reasons deeming it ‘An Impossibility’.
Previously, the earlier administration under ex PM Prayuth Chan-ocha came out with a solution that does not divide the country and connects the two ports, Ranong and Chumphon, with a Land Bridge instead. The project included two deep-water ports, a motorway and a railway system. Today, PM Sretha Thavisin has taken over the project and started marketing it vigorously with different countries to raise funds for the project which is estimated at a budget of 1 trillion baht.
In the past, major concerns have been raised in arguments against the project which involves high costs, environmental issues and displacement of locals, existing inefficient logistics network and management system and most importantly, profitability of the project.
In parliament last week, Pita Limjaroenrat, chief adviser to Move Forward Party voiced his opposition to the project and repeated most of the issues that have been put forth earlier by critics of the project.
Will the government be able to overcome these challenges and turn the project into a reality?
A project of this size requires a massive outlay and Thailand needs to look for foreign investment. PM Sretha has pitched the project to several companies from countries such as America, China, Japan , Germany, United Arab Emirates and India. The most interested party so far seems to be DP World, a company based in Dubai that specializes in investments in marine shipping, deep sea ports, logistics and transport.
PM Sretha is confident that getting the investment on board will not be an issue and has gone ahead in setting up a timeframe for the bidding of the contract by construction companies, scheduled for mid 2025. Project is expected to be completed by 2030.
Another concern is that the land bridge project would have a negative impact on the environment affecting Southern Thailand’s tourism and displacing locals.
In today’s world where awareness and emphasis is on environment and ecosystem sustainability, ports now play a vital role in the shipping industry’s broader drive towards decarbonization and environmental guardianship, generating unique strategies and new business models to cope with global green shift transformation.
While the International Maritime Organization(IMO) works with the shipping industry and other global stakeholders to manage the emissions of tankers and colossal container ships, port operators are working with shipowners and operators to ensure ports and other container terminals are supporting industry-wide efforts to decarbonize, reduce waste and mitigate local impacts on marine ecosystems.
Ports can turn to any number of projects to achieve their sustainability goals, from embedding clean energy, electrification to the bunkering of cleaner fuels.
With the industry’s growing emphasis on sustainability, new port facilities need to balance environmental responsibility with economic development. There exists an opportunity for Thailand to build ports based on sustainability as we start off with a clean slate where environment-conscious ideas can be embedded into a project from the very beginning.
There have been concerns raised by locals who fear that their livelihood might be adversely impacted or that they might not receive compensation for land they live on without legal documents. In an acknowledgement to these concerns, Transport Minister Suriya Juangroongruangkit has said that the land bridge contractors must set up compensation funds for such cases.
Perhaps one of the most discouraging reasons given for not going ahead with the project is the fact that Thailand’s current ports have existing inefficient logistics networks and management systems. This reason is discouraging because it implies that we cannot improve or get better to meet new challenges. The way forward should surely be to make certain that we implement the best logistics system and management, prepare the best talent from the start of the project itself , learn from the best and take lessons from our past inefficiencies? Is it not a possibility that the country can overcome this challenge with dedication and determination? Or do we wish to throw in the towel and say while other countries can run their ports efficiently, we are unable to and it is an ‘Impossibility’?
The most important question to be answered though is the question of profitability. Will there be a demand for the services of Thailand’s new ports?
Critics say bypassing the Mallacca Straits may well save sailing time but unloading goods at one end, transporting them onto other ships at the other end could take just as long as sailing through the straits and would actually increase transportation costs. Valid point, but critics are overlooking the fact that Singapore is currently the world’s busiest transshipment hub, with more than 30 million TEUs (Twenty-foot Equivalent Unit container) passing through every year.
What then is the concept of transshipment? Transshipment is when ships carrying goods stop at one distribution port( such as Singapore) to unload goods going to other ports, before loading goods to be transported to their destination port. Transshipment saves time and money as ships make less trips by going to one port, instead of traveling to several ports to load and unload goods.
Therefore, ships do not just refuel at Singapore port and then sail through the Malacca Straits to several ports along the way, they load and unload cargo at the Singapore port which serves as a distribution port and then the goods are transported to various destinations from there to other ports. It stands to reason that if Thailand can unload cargo or load cargo within the same time that it takes Singapore to do so then the saving in sailing time and the waiting time due to choking at the Malacca Straits will add to Thailand’s new ports’ competitive advantage.
Nothing is an impossibility, just challenges, albeit formidable ones, but the big question is whether the country is up to meeting these challenges or not?
https://thaimoves.com
