Thailand’s Land Bridge: Navigating Geopolitical and Investor Concerns

INTRODUCTION

The Thai government has announced a plan for a 90-kilometre land bridge to connect the Andaman Sea to the Gulf of Thailand. Estimated to cost USD 36 billion, this project aims to provide an alternative to the Malacca Strait shipping route, and attract a mix of private-sector investors and public-private partnerships. It involves constructing deep-sea ports at Ranong on the Andaman coast and Chumphon on the Gulf of Thailand, which will be connected by a new motorway and a dual-track railway. Ranong Port is expected to handle approximately 19.4 million twenty-foot equivalent units (TEUs), while Chumphon Port is projected to manage 13.8 million TEUs. Once completed, the land bridge is projected to generate up to 280,000 jobs and boost GDP growth by 1.5 per cent through expanded export opportunities. The first phase is set for completion by 2030, with the entire project targeted for conclusion by 2039.

The land bridge aims to position Thailand as a crucial transshipment hub in Southeast Asia and enhance transport links with neighbouring countries. It also provides an opportunity to improve port infrastructure, particularly at the currently underutilised Ranong Port, which mainly supports an oil rig in the Andaman Sea. Ranong handled only 1,323 TEUs in 2023. Upgrading this port to handle more cargo could establish a direct shipping route from Chattogram Port in Bangladesh, building on the Memorandum of Understanding (MoU) signed in December 2021. Strengthening ties with Chattogram Port would also enable streamlined transshipment to Nepal, Bhutan, and Northeast India through dedicated shipping lanes. The 2022 BIMSTEC Master Plan on Connectivity intends to create direct sea routes linking Ranong with the ports of Chennai and Colombo, potentially improving commerce in the Bay of Bengal region.

Thailand’s land bridge could transform the country into a pivotal logistics hub, providing an alternative to the Malacca Strait and enhancing regional connectivity. However, this article argues that its success depends on navigating geopolitical rivalries between global powers, competing with advanced port terminals in neighbouring countries, ensuring financial viability, and diversifying funding sources to balance economic growth with strategic autonomy. The project’s most significant challenge is ensuring financial viability; sufficient funding and investor confidence are crucial for overcoming operational, environmental and geopolitical issues. With substantial financial backing, Thailand can avoid over-reliance on a single funding source like China. Nevertheless, concerns about the project’s ability to attract sufficient traffic and generate returns have impacted broader investor confidence.

FEASIBILITY OF THE LAND BRIDGE PROJECT

While Thailand’s land bridge promises to reduce ship journeys by an average of four days and cut transportation costs by 15 per cent, several hurdles remain to be addressed. Ships must dock at either Ranong or Chumphon Ports to transfer cargo, requiring coordinated efforts among ship pilots, tug masters, customs officers, truck and train drivers, and crane operators. To ensure efficient operations and reduce delays, the Thai government needs to invest in advanced scheduling technologies, expand port staffing, and implement automated systems for cargo handling. However, this unloading and reloading process, which can take a day or longer, could still cause potential delays, especially if there is congestion at either port.

Moreover, the need for empty ships of the same size waiting on the other side poses significant challenges. It is unlikely that such ships would align perfectly with the arrival of containers from across the peninsula. When factoring in the transit time, multiple handling processes, and reloading onto another ship, any projected time savings might be negated. Additional costs and risks, such as cargo loss and increased insurance premiums, could also make the land bridge less attractive compared to the established Malacca Strait route.

Apart from these logistical concerns, examining the environmental implications associated with the proposed land bridge is essential. The Thai government has not yet conducted comprehensive environmental and feasibility studies, leaving key concerns unaddressed. The proposed infrastructure requires extensive land clearance, potentially leading to deforestation and the destruction of sensitive ecosystems including mangroves and evergreen forests. The area targeted for the land bridge is home to diverse flora and fauna, including endangered species like pale-capped pigeons, Nordmann’s greenshanks, and plain-pouched hornbills. The project’s heightening of industrial activity, pollution and waste may have long-term environmental and social impacts on nearby areas, such as the wetlands adjacent to the Ranong Biosphere Reserve. These wetlands are home to small-scale fisherfolk who rely on natural resources for their livelihoods, including access to food, water and vegetation. 

As such, local opposition to the project has been vocal and organised, with residents from Ranong and Chumphon, among others, voicing their objections. In May 2024, demonstrators rallied outside the Lang Suan district office to protest plans involving approximately 1,120 hectares of coastal land in Ranong and 928 hectares in Chumphon. These plans include the development of deep-sea ports, a new motorway, and a dual-track railway system. Further protests occurred in September 2024, where members from the Phato-Ranong Conservation Network assembled in front of Bhumjaithai (BJT) headquarters in Chatuchak district, Bangkok, to make their voices heard. Continued advocacy raises questions about the government’s commitment to transparently addressing these issues, especially given a perceived prioritisation of economic development over environmental and social factors.

The Thai government’s perceived lack of transparency has led to scepticism regarding its willingness to consider the concerns raised by advocacy groups seriously. Critics highlight significant gaps in government support for ecological studies. Conducting thorough environmental impact assessments, implementing safeguards, and compensating affected communities are cost-intensive processes. Without a genuine commitment to integrating environmental safeguards into the planning and execution of these initiatives, the balance between development and ecological preservation will be skewed towards economic priorities.

Financing the land bridge adds another layer of complexity to the project. The scale of the land bridge project necessitates significant investments, which may strain Thailand’s public finances. Although the Thai government seeks public-private partnerships and foreign investments, securing commitments has proven challenging. Despite initial interest expressed by over 100 Thai and foreign companies during a May 2024 event hosted by Thailand’s Office of Transport and Traffic Policy and Planning, no major global shipping companies have committed to supporting the land bridge. Investors might hesitate due to concerns about the project’s financial viability, particularly in the face of stiff competition from established regional hubs like Singapore’s Tuas Port and Malaysia’s Port Klang. Questions remain about whether the land bridge can attract sufficient shipping traffic to generate a robust return on investment.

In response to these financing challenges, Thailand announced plans in September 2024 to create an infrastructure fund of 300 billion baht (US$9 billion) strategically aimed at underwriting significant projects, including the land bridge. The primary goal of this initiative is to attract private investments by offering appealing financial returns linked to the project’s success. Reinforcing the project’s financial viability builds credibility, attracts further investments, and enables Thailand to address secondary challenges like infrastructure inefficiencies, environmental concerns, and community engagement. However, doubts linger over the stability of this investment, particularly if a change in government shifts policy priorities or threatens the project’s continuity. Thus, overcoming financial hurdles will be critical for the government’s broader ambitions linked to the land bridge project.

To support the land bridge and related infrastructure, the Thai government is preparing a draft bill for the Southern Economic Corridor (SEC), expected to take effect by September 2025. Yet, questions persist about the government’s ability to balance its development goals with the essential requirements of environmental preservation and social equity.

GEOPOLITICAL OPPORTUNITIES AND CHALLENGES

Given these complexities, Thailand’s land bridge project presents significant opportunities and challenges in positioning the country as a vital player in regional infrastructure development. This initiative aims to connect the Andaman Sea to the Gulf of Thailand through deep-sea ports and overland transport routes, facilitating trade and enhancing connectivity across Southeast Asia and China. By doing so, Thailand will establish itself as a key logistics hub, potentially driving economic growth through increased trade and investment. Additionally, while the Dawei Port in Myanmar remains a potential regional hub, Myanmar’s political instability has hindered its development, making Thailand’s project even more crucial to regional connectivity. However, this ambition is complicated by the country’s precarious geopolitical position amidst rising tensions and competing regional interests.

China has shown preliminary interest in the land bridge as it offers an alternative shipping route to the heavily trafficked Malacca Strait, which is under significant US naval presence. For China, this represents an opportunity to address the ‘Malacca Dilemma,’ where US control over the Strait poses risks to Chinese imports. By redirecting goods from Southern China through Laos and Thailand to deep-sea ports in Ranong and Chumphon, China could sidestep contested waters and reduce the risk of trade disruptions due to piracy or geopolitical tensions. In fact, enhancing Ranong Port might prove cost-effective for China’s Belt and Road Initiative (BRI), allowing for greater accessibility to international shipping routes while mitigating risks associated with geopolitical tensions.

For China, this represents an opportunity to address the ‘Malacca Dilemma,’ where US control over the Strait poses risks to Chinese imports.

During his October 2023 visit to Beijing for the Belt and Road Forum for International Cooperation, former Thai Prime Minister Srettha Thavisin emphasised the project’s significance, mainly as he engaged with high-level executives from major Chinese companies such as Alibaba and Xiaomi. By May 2024, Chinese delegations from Kunming and Chengdu had visited land bridge sites to evaluate the potential opportunities. Despite these engagements, China’s economic challenges and its shift toward more selective, quality-driven infrastructure investments cast doubt on its willingness to fund the project. An example is the Funan Techo Canal, designed to connect Phnom Penh to the coastal province of Kep, where China shows little interest in entirely investing in the project, suggesting concerns about the viability of expensive overseas projects.  

Recognising the dangers of over-dependence on China, the Thai government actively seeks to diversify its funding sources. During Srettha’s 2023 discussions with Saudi Arabian leaders, Thailand explored a free trade agreement with Gulf Cooperation Council (GCC) member countries and engaged Saudi investors such as the Public Investment Fund (PIF), Saudi Aramco, and SABIC, for energy investments. Additionally, Dubai Port World has shown interest in the land bridge by conducting on-site assessments, further broadening Thailand’s avenues for investment. These efforts aim to attract alternative funding and reduce reliance on a single country, ensuring that Thailand retains greater control over its strategic projects. However, given the scale of investments needed for the land bridge, the question remains whether Thailand can afford to be selective.

Regional powers, especially India, are furthermore wary of China’s growing influence in the Indian Ocean and Southeast Asia. China’s contributions to the development of Chattogram Port in the Bay of Bengal have heightened Indian apprehensions. India could perceive the land bridge as potentially part of China’s broader strategy to encircle and isolate it, especially given the historical context of rivalry, and China’s support for Pakistan. In response, India has pursued infrastructure projects such as the India-Myanmar-Thailand Trilateral Highway, and enhanced its naval facilities in the Andaman and Nicobar Islands.

However, India’s stance on the land bridge is not uniformly oppositional. India has expressed interest in exploring participation in this project, reflecting a dual approach that seeks to counterbalance Chinese influence while pursuing regional collaboration. This highlights the intricate dynamics of India’s engagement in Southeast Asia and underscores the need for Thailand to navigate its relations with China and India carefully.

Balancing relations with competing global powers poses a significant challenge for Thailand. The US and its allies may view the land bridge as an extension of Chinese influence, potentially complicating Thailand’s hedging strategy. What was initially envisioned as a catalyst for economic growth could become a politically charged issue, leading to concerns about national sovereignty. Thailand risks falling into a dependency trap if Chinese companies in sectors like electric vehicles and technology relocate to Southern Thailand, compromising Thailand’s sovereignty in decision-making and straining relations with traditional partners. To navigate these challenges, Thailand could promote the land bridge as a neutral, regional asset that enhances ASEAN connectivity. By engaging with a broad range of international stakeholders and emphasising the project’s role in fostering regional cooperation, Thailand can mitigate risks of being perceived of being aligned too closely with any single power.

COST-EFFECTIVE OPTIONS AMID REGIONAL COMPETITION

In addition to the need for diversified international partnerships, the land bridge faces significant competition in regional trade logistics. Although Thailand’s proposed land bridge could shift some shipping traffic away from the Malacca Strait, this expectation overlooks the ongoing enhancements to nearby port terminals. For example, Singapore’s Tuas Port is set to become the largest fully automated port in the world, integrating automation and digital technologies, including artificial intelligence, to optimise operations like vessel traffic management and port clearance. Once fully operational, Tuas Port is projected to manage 65 million TEUs. Similarly, Malaysia plans to expand Port Klang’s capacity from 14 million to 27 million TEUs by reclaiming coastal land and increasing the number of container terminals from nine to 17. The completion of Malaysia’s East Coast Rail Line (ECRL), linking Port Klang to Malaysia’s east coast, is also anticipated to attract further industrial development in the region. In comparison, the expected capacities of Ranong Port, at 19.4 million TEUs, and Chumphon Port, at 13.8 million TEUs, appear modest. This highlights the competitive pressure Thailand faces; it remains unclear whether the expected trade flows will justify the scale of investment required.

Moreover, international shipping firms appreciate Singapore’s strong regulatory framework, political stability, and reliability. The country also offers essential services like financing, insurance, ship repairs, and legal assistance, which enhances its appeal to businesses. The ongoing reliance on Singapore for transshipment services indicates that many international shipping firms still see it as a critical node in global logistics. Although Thailand’s land bridge may provide a shorter and cheaper route, it cannot match Singapore’s established port infrastructure and support services. If most cargo on the land bridge consists of transshipment containers, it underscores the need for efficient transfer between vessels. This reliance on transshipment presents challenges since it demands advanced logistics, streamlined coordination, and high efficiency — areas where Thai ports may fall short compared to Singapore.

Rather than competing directly with established hubs like Singapore and Malaysia, Thailand could achieve its strategic goals by upgrading its existing ports and transport infrastructure. Expanding the existing Ranong Port, for example, offers a cost-effective alternative to building new deep-sea ports. Situated on the Andaman Sea, Ranong Port could serve as a gateway to South Asia and the Middle East. Enhancing port infrastructure with advanced technologies, deeper berths, and improved cargo handling efficiency would improve logistical efficiency and boost competitiveness. Additionally, improving overland connectivity to existing highways and railways linking Ranong to Thailand’s major hubs could fulfil many of the land bridge’s objectives without incurring the substantial environmental and financial costs associated with large-scale land clearance.

Rather than competing directly with established hubs like Singapore and Malaysia, Thailand could achieve its strategic goals by upgrading its existing ports and transport infrastructure.

Laem Chabang Port, Thailand’s largest port and a key node in the Eastern Economic Corridor, presents another viable alternative. Already linked to the Thailand-Laos-China railway and positioned near growing industrial zones, Laem Chabang has the potential to serve as Southeast Asia’s primary eastern gateway. Current developments, like the China-Laos railway and the Bangkok-Nong Khai railway upgrades, are paving the way for this. Therefore, expanding and upgrading Laem Chabang Port presents another cost-effective solution, leveraging its existing infrastructure and position as the country’s largest port near the Eastern Economic Corridor. By integrating it more closely with regional initiatives under the ASEAN Master Plan on Connectivity and upgrading its facilities to handle larger trade volumes, Thailand could strengthen its role as a regional logistics hub. This approach would also align with existing infrastructure investments.

Moreover, enhancing existing ports requires less capital investment, mitigating the need to rely on investments from any single country. By leveraging its strategic location and established infrastructure, Thailand could still position itself as a critical transit hub within ASEAN. Such an approach would also address environmental concerns and allow for incremental investments, enabling Thailand to adapt to fluctuating trade demands while avoiding the risks of overcapacity. With this balanced approach, Thailand can achieve its economic objectives while minimising risks, fostering regional collaboration, and maintaining its neutrality amid competing regional powers.

CONCLUSION

Thailand’s land bridge project faces challenges in managing geopolitical rivalries and competing with advanced ports in neighbouring countries. Additionally, logistical issues such as transit times and reloading processes could diminish potential time savings. The large-scale project requires significant investment, and attracting private-sector involvement could be difficult due to concerns about financial viability. These concerns about attracting sufficient traffic and generating returns have hindered investor confidence. While Thailand seeks Chinese investment, it must avoid overreliance on a single partner.

Hence, the recommendation is to focus on upgrading existing ports and transport infrastructure, which may allow Thailand to meet its economic objectives while preserving its strategic autonomy without fully committing to the land bridge. This approach also mitigates environmental concerns, such as deforestation and emissions associated with large-scale construction projects.

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This is an adapted version of ISEAS Perspective 2025/13 published on 18 February 2025. The paper and its references can be accessed at this link.