The Landbridge project is said to significantly reduce the shipping time of goods between the Indian and Pacific Oceans.
Currently, most cargo ships have to pass through the Malacca Strait between Malaysia and Indonesia. This is one of the busiest sea routes in the world, 805 km long, the narrowest point is only 1,2 km wide.
The Malacca Strait is located on a very important traffic route, transporting goods by waterway from Europe, Africa, South Asia, the Middle East to Southeast Asia and East Asia. This is where 1/4 of the world's annual maritime traffic is accounted for.
Strait of Malacca (red ellipse) and the planned area of the Landbridge project (yellow ellipse), on the left is the Indian Ocean, on the right is the East Sea.(Photo: AM/Google Map)
Every year there are about 50.000 ships passing through, including oil tankers, container ships, and fishing boats.
Tens of millions of barrels of oil are transported through here every day, mainly supplied to China, South Korea and Japan. The world's three leading economies in East Asia rely heavily on the sea route through Malacca.
Half of China, South Korea and Japan's fuel tankers pass through here. Thailand's new project is outlined with the goal of replacing the sea route through the Strait of Malacca with a complex transportation system including seaports, roads and railways.
Earlier this week, Thai Prime Minister Srettha Thavisin told investors in San Francisco, USA that the Landbridge project could cut travel time between the Indian Ocean and the Pacific by about four days, reducing costs by 15%. transport. He said that with traffic volume expected to exceed the capacity of the Strait of Malacca by 2030, the new project will ensure the smooth flow of goods.
According to the Thai government, the Landbridge project will cost about 1 trillion baht (28 billion USD). The seaports will be built on both sides of the country's southern peninsula and connected by a network of highways and railways. This 100km connection will replace Thailand's decades-old idea of digging a canal across the Kra Isthmus.
The Strait of Malacca is the shortest sea route connecting the Asia-Pacific region with India and the Middle East. Mr Srettha said about a quarter of the world's trade passes through the strait and it will only get more crowded, pushing up shipping costs.
The Thai Prime Minister noted that there are on average more than 60 maritime accidents each year on this route. “Landbridge will be an important route, an important option to solve the problems of the Strait of Malacca. This will be a cheaper, faster and safer route.”, Mr. Srettha said. He said that according to the project proposal, the western port has a capacity to handle 19,4 million tons of cargo, while the eastern port is designed for 13,8 million TEUs (a unit of measurement in the maritime industry, a TEU is equivalent to the capacity of a 6,1 meter container according to international standards).
The handling capacity of two Thai ports is equal to 23% of the total cargo handling capacity of ports in the Strait of Malacca including Klang port in Malaysia and Belawan port in Indonesia. Prime Minister Srettha has introduced investors in China and Saudi Arabia in recent weeks to a project that will create 280.000 jobs and boost Thailand's annual economic growth rate to 5,5 % when fully realized.
Southeast Asia's second largest economy grew 2,6% last year and is forecast to grow 2,5-3% in 2023. Thailand aims to complete the project by 2030 and foreign investors will be allowed to own more than 50% of the shares in the joint venture to build the port and related infrastructure.
According to Thailand's Office of Transport Policy and Planning, deep-sea ports planned to be built in Ranong overlooking the Andaman Sea and Chumphon in the Gulf of Thailand could cost 630 billion baht or $21 billion. Thai officials will hold a presentation for potential American investors during the Asia-Pacific Economic Cooperation summit this week.
Prime Minister Srettha said American companies interested in this project include SSA Marine Inc., Port of Long Beach, Oracle Corp. and Webtec.
Thailand has discussed for decades the idea of building a canal (the Kra Canal project) that would pass through the country's narrowest point and reduce the distance traveled from the Indian Ocean to the Pacific by 1.200km, but That proposal has been rejected multiple times because of environmental concerns.
The new project, instead of digging a canal, will build ports on the east and west banks and connect these two points to each other by road and rail.
