By ERICH PARPART
Pakdee Tanapura, deputy director of the economic section at Thai-Chinese Cultural and Economic Association and a member the National Committee for the Study of the Kra Canal Project, said the Kra Canal could be part of the new “Maritime Silk Road” in the South of Thailand.
It could ease the increasing congestion in the Malacca Strait, reduce global shipping times and boost the country and the region’s economies from job creation and increase in investment, while solving the unrest in the deep South by narrowing the economic disparity.
A pre-feasibility study on the Kra Canal and a special economic zone has revealed that the 26-metre-deep and less-than-100-kilometre-long waterway would cost about US$20 billion to build and reduce shipping times between the South China Sea and the Andaman Sea by at least 48 hours.
The best route is the “5A” line between Songkhla and Satun because it is situated right on the shipping lane, it is one of the shortest of all the possible routes and it has the most potential for industrial estates.
“The Maritime Institute of Malaysia’s study shows that the Malacca Strait is expected to be over-congested in 10 years. This important chokepoint has about 90,000 ocean-going vessels passing through it every year and about 12 million barrels of oil passing through each day.
“By 2025, there will be about 140,000 vessels and ocean freighters passing through the strait but it can only accommodate about 122,000 ships,” he said.
The strait is the shortest shipping route between the Pacific and Indian oceans. More than 90 per cent of ocean-going vessels navigate through the strait and the value of cargo passing through it is about 15-20 per cent of world trade.
The obvious consequence from the over-congestion is the slowdown in shipping, which could affect the global economy and increase shipping costs because most of the shipping cost depends on timing.
Other choices are the Sunda and Lombok straits in Indonesia but they would be even more time consuming since they would double or triple the pass-through time.
The Kra Canal would cut logistics costs and increase trade in the region while its construction along with the expected investment in the special economic zone developed alongside the canal could create at least three million jobs and attract more foreign direct investment to the region.
The canal would answer Thailand’s craving for major investment, which is needed to escape from the middle-income trap, while easing the problems in the deep South from the increase of economic activities and job creation, since the fuel that adds fire to the unrest in the South is economic disparity.
China is interested in helping Thailand build the canal since it would improve connections between Thailand and the southern part of China. Chinese goods from Kunming could go through Laem Chabang Port to reach the Indian Ocean via the Kra Canal.
China has recently signed an agreement with Thailand that gave the Chinese a leading role in developing the 1.435-metre gauge railway stretching 734 kilometres from Nong Khai to the Map Ta Phut Industrial Estate in Rayong.
Pakdee said the University of International Business and Economics in Beijing has been working with the National Committee for the Study of the Kra Canal Project on the pre- feasibility study.
China’s Information Office of the State Council in conjunction with the Chinese Academy of Social Sciences and the Fujian Academy of Social Sciences will arrange an international seminar on the 21th Century Maritime Silk Road Initiative on February 21 in Quanzhou.
The Kra Canal is one of the main projects that will be presented at the seminar.
The Kra Study Committee plans to conduct a complete, detailed and multidimensional feasibility study that would take one year to complete before presenting it to the government, but governments in the past have always hesitated to adopt the project, he added.
Vallop Vitanakorn, vice chairman of the Thai National Shippers Council and vice chairman of the Federation of Thai Industries, said the Kra Canal is a good investment and it would greatly help the economy.
However, it is unlikely to happen because Thais are not ready for the idea of “breaking up the country” and the government is wary of the security concerns.
Pakdee argued that a problem of separation does not arise because of a physical aspect. It is only a political aspect as seen in Korea where the North and the South are physically connected but divided by a demilitarised zone.
There would be no international political complications, which is often a serious inconvenience for shippers, since the canal would be passing though only one country.