The Kra Land Bridge: Thailand’s White Elephant Comes Charging Back

Bad ideas can be surprisingly durable.

In Thailand, this is certainly the case with the ruling elite’s centuries-old obsession with building a transport corridor across the Kra Isthmus.

Since the late seventeenth century, the Thais have endlessly debated the pros and cons of cutting a canal across the narrow neck of land in the south of the country. But a Kra canal has never been built due to eye-watering construction costs, engineering challenges and weak economic rationales.

But the latest iteration of this proposition is being enthusiastically promoted by the newish government of Prime Minister Srettha Thavisin.

Since taking office in August 2023, Srettha’s policy focus has been laser-like: to revitalise the Thai economy after a decade of sluggish growth caused by military mismanagement and compounded by the Covid-19 pandemic.

To that end, the government has prioritised the signing of free trade agreements, while Srettha himself has crisscrossed the globe courting foreign investment. Bangkok, casting an envious eye on Singapore, also has ambitions to play a much bigger role in global supply chain networks. 

In pursuit of this grand economic vision, Srettha has become proponent-in-chief of another old idea: the construction of a so-called land bridge across the Kra Isthmus.

Srettha has clearly nailed his flag to the land bridge mast, but his own political future remains uncertain.

The plan calls for the construction of deep water ports in Chumphon province on the Gulf of Thailand side of the isthmus and Ranong province on the Andaman Sea side. The two ports would be linked by 90 kilometres of highways, railways and pipelines. Ships carrying goods made in Northeast Asia would unload their cargoes in Chumphon which would then be whisked to the other side by trucks and trains, while vessels laden with wares from western Asia and Europe would do the same at Ranong.

The land bridge was first proposed by Prime Minister Thaksin Shinawatra in 2005, but was snuffed out a year later when he was ousted in a military coup. Ironically, following another coup in 2014, the military resurrected the idea in 2020, though it failed to gain traction because of the global economic dislocation caused by the pandemic.

Srettha has revitalised the idea with gusto, recycling arguments long trotted out by proponents of the Kra Canal. First, by bypassing the increasingly congested Straits of Malacca, shipping companies will save three to four days sailing time, thereby reducing transportation costs by 15 per cent. Second, construction of the land bridge will provide a 1.3 trillion baht (US$370 billion) boon to the economy, raising economic growth by 1.5 per cent and providing jobs for 280,000 workers. It would particularly benefit the economy in the south where the ruling coalition parties fared so poorly in the May 2023 general election. Third, the land bridge would place Thailand at the heart of Southeast Asia’s supply chains.

As with the Kra canal, critics of the land bridge have called into question the project’s economic viability. Bypassing the Malacca Straits may well reduce sailing times, they argue, but off-loading goods at one end, transporting them to the other end, and then re-loading them onto other ships could take just as long as sailing through the straits and would actually increase transportation costs.

In addition, the land bridge would have a negative impact on the environment, hurting southern Thailand’s tourism and fishing industries. Moreover, geopolitically, ownership of the land bridge might suck Thailand into the vortex of US-China competition, especially if Beijing was to fund its construction.

Undeterred by these arguments, Srettha has said he is determined to see the project through and has even proposed a timeline. Construction companies would bid for contracts in mid-2025 with construction slated to begin later the same year and completed by 2030, at a total cost of around US$30 billion.

What Srettha has been coy on is who would pay for the land bridge. A project of this size requires massive foreign investment. The prime minister has pitched the idea in America, China and Japan. So far the response has been polite but non-committal.

Although Chinese construction companies would be well-placed to build the ports, roads and railways required, Beijing itself is unlikely to adopt the project as part of its Belt and Road Initiative (BRI).

As China’s economic growth splutters, its leaders have become far more cautious about funding giant overseas infrastructure projects, especially ones of questionable economic value like the land bridge. Tokyo also appears uninterested.

Tellingly, none of the world’s major shipping companies have rushed to endorse Srettha’s proposal.

Singapore, the world’s second-busiest container port and a potential loser if the land bridge goes ahead, has responded in very measured tones. When questioned in Parliament about the project, acting transport minister Chee Hong Tat highlighted the increased transport costs the land bridge’s double-handling of containers would incur, and pointed to Singapore’s efforts to improve connectivity, productivity and efficiency in the country’s ports, and the increased capacity the new Tuas megaport will provide.

Srettha has clearly nailed his flag to the land bridge mast, but his own political future remains uncertain, with many observers viewing him as simply a placeholder for Thaksin’s daughter and leader of the Pheu Thai Party, Paetongtarn Shinawatra.

If Srettha is replaced within the next couple of years, the land bridge idea may well sink with him.

Should this happen, advocates of Kra transportation links need not fret. Soon after he is gone, the proposal will almost certainly resurface again, in one form or another.

2024/14