Thailand to build S$40 billion land bridge to bypass Malacca Strait

BANGKOK: Thailand’s Deputy Prime Minister Phiphat Ratchakitprakarn told members of the media on Monday (April 20) that it is going ahead with a land bridge that would connect the Indian and Pacific oceans.

Significantly, the long-planned bridge will bypass the Strait of Malacca, which has been in the news lately in the context of the war in the Middle East and the effective closure of the Strait of Hormuz, which has caused a global fuel crisis.

Mr Phiphat, who also oversees the Ministry of Transport, said the current situation has underscored the importance of key shipping routes and that the government will move forward with the project, which will cost 1 trillion baht (around S$40 billion).

Bloomberg quoted him as saying, “The Middle East conflict has demonstrated the advantage of controlling a transport route. Thailand will have a great advantage by operating the link between the Pacific Ocean and the Indian Ocean.”

Land bridge

The land bridge would allow for a trade route across the southern part of the country, which separates the Andaman Sea in the Indian Ocean from the Gulf of Thailand, which is part of the Pacific Ocean. This would mean an alternative transport route to the Strait of Malacca, one of the world’s most critical shipping lanes. The strait regularly gets highly congested due to its narrow shape, particularly at the Philip Channel between Singapore and Indonesia’s Riau Islands, where it spans approximately 1.7 to 2.8 kilometres (roughly 1.5 to 2 nautical miles).

Furthermore, Mr Phiphat added that the land bridge would mean that the shipping time between the Indian and Pacific Oceans would be decreased by an average of four days, with around 15% decease in shipping costs as well.

For the project to proceed, the Thai government needs to pass the necessary legislation. Should it get a green light this year, the land bridge is expected to be compacted by 2039 and break even in 24 years. Due to fuel sales to cargo ships, 58 billion baht (S$2.3 billion) is expected to be earned in the first year of operation of the land bridge.

Mr Phiphat noted that other countries, including the United Arab Emirates, have shown interest in the project, which needs the private sector, given its high cost. DP World and Hong Kong’s New World Development are also interested, Thai officials have said.

He told Bloomberg, “A project of this scale will also drive investment and job creation. We estimate it could generate around 200,000 new jobs.” /TISG

Read also: Singapore, Malaysia, and Indonesia pledge to protect Strait of Malacca; US warship seen transiting