ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronEye IconIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon PrintTitle ChevronIcon Twitter
Economy

European business leaders back a Thai canal project

Conference staged by influential Thais calls for seaway linking Indian and Pacific Oceans

The estuary of the remote Galasai River separating Thailand’s Krabi and Trang provinces would become the entrance to the Kra Canal. (Photo by William Mellor)

BANGKOK An ambitious, $28 billion plan to build a ship canal linking the Indian and Pacific oceans has received a major boost of support as European business leaders in Thailand join Chinese government advisers and influential Thais to urge the military junta to pursue the project.

"We believe the project should have a very high priority for the government," Rolf-Dieter Daniel, president of the European Association for Business and Commerce, the umbrella group of European chambers of commerce in Thailand, told an international conference in Bangkok on Sept. 11.

A regional equivalent of the Suez or Panama canals, the proposed Kra Canal -- or Thai Canal -- would slice through the Malay Peninsula some 800km south of Bangkok and about 200km north of Thailand's border with Malaysia, linking the Gulf of Thailand and the Andaman Sea at roughly the same latitude as the resort island of Phuket. Supporters say it could be completed within five years.

Daniel said his association is firmly convinced that Thailand needs to expand its infrastructure to ensure the future growth of the country's export industries. "We have great concerns," he said. "Some projects, especially in the railway sector, run the risk of ending in an economic fiasco due to the lack of consideration of the costs of operation and maintenance."

By contrast, Daniel noted, the Kra Canal had much better prospects, judging by the success of similar projects elsewhere in the world such as the Suez, Panama and Kiel canals.

If approved, the canal would be one of the most ambitious and transformational infrastructure projects ever contemplated in Asia. The canal would bypass the narrow, piracy-prone and strategically sensitive Strait of Malacca, the world's busiest trade route, which links China, Japan and other East Asian nations with the oil fields of the Middle East and major markets in Europe, Africa and India. The distance saved for ships passing between the Indian and Pacific Oceans would be at least 1,200km, or up to three days' sailing time. Also, the Strait of Malacca is reaching optimal capacity, with a record 84,000 vessels passing through it last year.

"As the canal offers tremendous advantages for freight traffic between Eastern Asia, Japan and China, and the West, India and Europe, we are sure that international shipping is willing to pay appropriate charges," Daniel said. "So financially, this project shall not be a problem and will not burden the Thai taxpayer. Therefore, we can only recommend the Thai government to issue a current feasibility study as soon as possible."

Supporters are hoping that the 135km-long canal can be funded largely through China's multibillion-dollar Belt and Road Initiative and 21st Century Maritime Silk Road infrastructure projects. Speakers from China at the conference certainly encouraged that view.

Zhou Dawei, a professor from Peking University, which has surveyed the proposed route, compared the Kra Canal with global megaprojects such as the Three Gorges Dam in China and the Channel Tunnel linking Britain and France. "If we are lucky enough, we expect that in the near future, the Thai Canal will also appear on this amazing list," he said.

JUNTA SILENT However, there is no sign that Thai Prime Minister Prayuth Chan-ocha is listening. For him, it has all seemed too grand a plan.

"Those who want to initiate the Kra Canal have to push forward the project in the next government," Prayuth said in January 2016. "I won't do it now because I have a pile of urgent work to finish."

As reported exclusively by the Nikkei Asian Review in August, some of the country's most influential figures -- including retired military chiefs, politicians, academics and leading businessmen with close links to China -- are urging him to change his mind.

And they upped the ante by organizing Sept. 11's international conference on the canal at Bangkok's Grand Hyatt Erawan Hotel. Organizers had hoped Prayuth's economic guru, Deputy Prime Minister Somkid Jatusripitak, would open the conference. Failing that, they expected another government minister to attend. As it turned out, there was no official Thai government representation among the 150 or so participants, suggesting that, for now at least, the pro-canal lobby still has much work to do.

Other governments, however, were well represented at the conference, including diplomats and officials from Japan, China, the U.S., Singapore, Malaysia and the European Union.

The conference was jointly organized by a leading Thai university, King Mongkut's Institute of Technology Ladkrabang, and the Thai Canal Association for Study and Development, an organization formed by a group of retired military officers. Other prominent participants were members of the Thai-Chinese Culture and Economy Association, a Bangkok-based organization with close links to Beijing and which is headed by former Thai Deputy Prime Minister Bhokin Bhalakula.

The canal's supporters seemed far from put off by the absence of a Thai minister. Gen. Pongthep Thesprateep, who heads the Thai Canal Association, opened the conference with a call for the government to pick up the project as soon as possible. "Today marks a very important day in the history of Thailand," Pongthep told the audience. "I hope that the result of this conference will act as a catalyst for the Thai government to create a national committee for a complete feasibility study of the Thai canal project. The study should provide answers to any doubts that may still exist."

Another military heavyweight to address the conference was Adm. Supakorn Buranadilok, president of the Royal Thai Navy Advisory Group. A former Supreme Commander of the armed forces, Gen. Saiyud Kerdphol, sent a long message of support in which he called for the canal to be made a project of the Thai monarchy -- a "King's Project" -- to avoid it becoming bogged down in politics.

There is still much that could bog down the canal project. First proposed by Thai royalty more than 300 years ago, it has repeatedly been stymied by political, technical and financial obstacles.

Public support for the canal is also far from unanimous, with proponents and opponents arguing over security implications about the waterway, which would divide most of the overwhelmingly Buddhist country from three insurgency-plagued and largely Muslim southern provinces. A canal could also fuel tensions within the Association of Southeast Asian Nations because it would bypass and take business from regional shipping hubs such as Singapore.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Try 1 month for $0.99

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends October 31st

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to Nikkei Asia has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media

Nikkei Asian Review, now known as Nikkei Asia, will be the voice of the Asian Century.

Celebrate our next chapter
Free access for everyone - Sep. 30

Find out more