Thailand Seeks US Investment for $28 Billion Malacca Strait Bypass Initiative
Thailand is presenting an ambitious multibillion-dollar venture aimed at significantly reducing shipping durations between the Indian and Pacific Oceans by circumventing the Malacca Strait, one of the world’s most congested maritime routes.
Prime Minister Srettha Thavisin, addressing investors in San Francisco, highlighted that the project could cut average travel time by four days and decrease shipping expenses by 15%. With projections indicating that the Malacca Strait’s capacity will be surpassed by 2030, the Landbridge project aims to ensure a seamless flow of goods.
The Landbridge initiative, with an estimated cost of 1 trillion baht ($28 billion), involves the construction of seaports on both sides of Thailand’s southern peninsula, interconnected by highway and rail networks. The 100-kilometer (62-mile) connection is set to replace a long-standing Thai proposal to dredge a canal through the Kra Isthmus.
The Malacca Strait, positioned between Malaysia and Singapore, serves as the shortest sea route connecting the Asia-Pacific region to India and the Middle East. Approximately a quarter of the world’s traded goods traverse this strait, and with increasing traffic, shipping costs are expected to rise. Prime Minister Srettha emphasized that the Landbridge offers a more cost-effective, faster, and safer alternative route.
The western port is designed to handle 19.4 million ton equivalent units (TEUs), while the eastern counterpart is planned for 13.8 million TEUs, together constituting about 23% of the total cargo capacity of the Port of Malacca.
Srettha asserted that the project, previously presented to investors in China and Saudi Arabia, is anticipated to generate 280,000 jobs and boost Thailand’s annual economic growth rate to 5.5% upon full implementation. Thailand’s economy, the second-largest in Southeast Asia, grew by 2.6% last year and is projected to expand by 2.5%-3% in 2023.
The completion target for the Landbridge project is 2030, and foreign investors will be permitted to own more than 50% in joint ventures with local entities for building the ports and associated infrastructure. The deep-sea ports in Ranong in the Andaman Sea and Chumphon in the Gulf of Thailand are estimated to cost 630 billion baht, according to the Office of Transport and Traffic Policy and Planning.
Srettha sees the Landbridge as an unprecedented opportunity for both commercial and strategic investment, connecting the Pacific and Indian Oceans and bridging East-West relations. Thai officials are set to present the project to potential US investors during the Asia-Pacific Economic Cooperation summit, with interested American companies including SSA Marine Inc., Port of Long Beach, Oracle Corp., and Webtec, according to Srettha.
Thailand had long considered a canal project at its narrowest point to reduce travel distance by 1,200 kilometers, but this proposal faced repeated dismissals due to environmental concerns.
-DG
