Thailand's 'Landbridge' will bring East and West closer together


Srettha Thavisin is the prime minister of Thailand.

My inaugural visit to Tokyo as Thailand's prime minister is happily coinciding with the commemoration of the 50th anniversary of ASEAN's enduring ties with Japan.

This marks a pivotal juncture to present a compelling investment opportunity. Thailand's Landbridge mega infrastructure project is an endeavor toward establishing seamless connectivity to augment long-term growth prospects in the region and is fully aligned with my government's proactive economic diplomacy.

The project will encompass the building of deep-sea ports at Ranong on Thailand's Andaman coast and at Chumphon on the Gulf of Thailand. Situated roughly 90 kilometers apart, the two ports will operate under a "one port, two sides" concept, supported by a freeway and dual-track railway lines to connect the ports with each other and with the country's national network.

Each port will have the capacity to handle up to 20 million standard shipping containers a year. The plan also includes the installation of an oil and gas pipeline network. The estimated total cost amounts to 1 trillion baht ($28 billion).

The Landbridge project represents an unprecedented opportunity to enhance connectivity between the Pacific and Indian oceans, and to link economic activity between the two regions.

It promises to facilitate increased movement of goods and people between East and West, offering a viable sea-trade thoroughfare in addition to the Strait of Malacca.

Once completed, the Landbridge is expected to shorten travel time by an average of four days between the Indian and Pacific Oceans and reduce transportation costs by 15%. For a company shipping goods from Chennai to Yokohama, for example, this could mean a savings of up to five days and 4% in costs.

Those familiar with Thailand's logistics development may see the Landbridge as a modern reworking of a centuries-old proposal to dredge a canal through the Isthmus of Kra.

Despite having been originally approved in 1989 as part of Thailand's Southern Economic Corridor, various considerations have left this project unrealized until today. Now the timing will align well with the growth prospects of the economies of the Indian subcontinent and Africa.

Environmental and health issues and concerns are expected to be considered, discussed and addressed through a careful environmental and health impact assessment process.

The Landbridge project will be executed through public-private partnerships, with foreign investment key to making it a reality. Positive responses from potential partners have already come in at the initial stage as the benefits of the project for logistics operators and maritime shipping companies start to become evident.

Proposed Southern Economic Corridor legislation will govern arrangements for services to be provided, tax incentives and land rights within planned special economic zones at the new ports. The bill will also cover rules for foreign investment and regulatory incentives concerning travel, stay and work permits to better attract international investors. A single agency will be in charge of the overall project, ensuring that operations on both coasts are integrated.

Plans call for the first phase of construction to begin in September 2025 and run through October 2030. Contractors will likely be able to bid on the project between April and June 2025.

The Landbridge is projected to bring 1.3 trillion baht in benefits to Thailand's economy and raise the country's annual gross domestic product growth rate by 1.5% via increased export opportunities and the creation of 280,000 jobs. It will also bring new development opportunities for other provinces in southern Thailand.

The potential impact on Thailand's domestic economy should not be underestimated. The Landbridge has also been crafted with an eye toward the potential impact on our government's efforts to address issues like inequality and household debt.

The project will also strengthen supply chains in the region while leveraging ASEAN's potential as a logistics hub. After Asia's experience with COVID-19, enhancing supply chain resilience has become an objective in and of itself, so the Landbridge can ensure benefits for all involved.

The Landbridge will help to resolve issues around existing shipping routes, and offer a faster and safer choice for transportation and trade at lower cost and with consideration for the environment.

More importantly from a long-term point of view, my government is approaching this project as an integral cog in our comprehensive efforts toward stimulating Thailand's economy, recognizing its potential positive impact on the entire region.

The Landbridge is a critical component of our wider effort to upgrade infrastructure and enhance railway and transport links with neighboring countries, as well as to establish medical facilities to meet domestic and regional needs.

Undoubtedly, securing funding will be key to the project's realization. International investors should consider becoming part of this exciting new venture.

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