It’s now or never for the much talked about Thai canal project.
The much talked about Kra Canal project may get underway as soon as next year with an assist from China’s Belt And Road initiative.
However, with nothing currently signed and a history of failing to get off the ground, the canal is far from a done deal. The idea of the Kra Canal is nothing new. It was first floated in 1677 and both the British and French surveyed potential areas for the canal around Songkhla during the 19th century. King Rama IV even gave permission to the British to build it in the middle part of the century, but the plan was eventually abandoned.
In the early 20th century, King Rama VI reportedly had an interest in building with the canal yet it never moved beyond the idea phase. Various attempts since then to get the canal built have failed to gain any traction until recently. With China continuing to emphasis the Maritime Silk Road as part of its Belt And Road initiative, the Kra Canal is a project firmly on the country’s radar.
“When you look at the sea routes of Southeast Asia, and in particular the Straits of Malacca, the Kra Canal is needed. The Straits of Malacca are very congested and the number of ships passing through it is only going to increase,” Dr Harald Wagner, Civil Engineering Instructor at King Mongkut’s Institute and a former World Bank Consultant, explains. “The Kra Canal would relieve this pressure and improve shipping flow between the Indian and Pacific Oceans.”
The first step for the project is a feasibility study, which the government has yet to sign off on. According to Dr Wagner, the approval is very close to happening and could be granted as soon as early 2018.
“It is important for the government to authorize a feasibility study on the Kra Canal and get it completed. Both China and Japan have stepped up and offered to finance the feasibility study meaning the Thai government won’t have to spend a single Baht on this,” Dr Wagner says. “The study itself will be comprehensive and provides the next government the base to make a decision on how best to proceed.”
Should the feasibility study be approved, a realistic timeline for the building and completion of the Kra Canal would then start to take shape.
“The feasibility study would take two years to complete. There would also be a one-year negotiation period that would include the agreement of construction contracts with multiple firms and a risk management plan after that. Once that is completed, construction could then proceed,” Dr Wagner details.
He continues, “Should the feasibility study be approved in 2018 and everything moves ahead as planned, the Kra Canal could be operational as soon as 2027. This factors in the five years it would take to build the actual canal as well as the feasibility study and other necessary steps. However, in order for this ambitious target to be realistic, action must be taken soon.”
Once the feasibility study is completed, plans will need to be presented to the government for approval. The Nikkei Asian Review reports that there has been pressure from retired Thai generals, politicians, academics and businessmen to get the Kra Canal project moving, but the current government has said it will not act on the project given its size and scope.
“The current government will let the next government decide what to do since it will have the necessary conditions and legislative framework in place to approve it,” Dr Wagner says. At the moment, the current government has several other projects it is working on and wants to get these completed.”
Elections in Thailand are tentatively scheduled for 2018 with the next government set to take office in 2019. However, should these elections
be delayed, the feasibility study may be completed before the new government is in place.
In this scenario, the current government would either need to make a decision on how to proceed or delay the project’s approval until the elected government is installed. With China eager to get the project it is willing to support both financially and logistically off the ground, any delay on a decision from the Thai government may submarine the renewed efforts to get Kra Canal built.
“Thailand should take advantage of China’s position now and start the Kra Canal project. Don’t delay the project, now is the right time. If Bangkok delays the project it might not get the backing from China,” Mr. Jingsong Song, a professor at Shanghai Jiao Tong University, warned during a recent conference. The hold up
Even with both domestic and international players trying to persuade the government to move forward with the Kra Canal project, the sheer size and scope of it combined with a lack of tangible information has left some skeptical as to its impact and cost.
“There is still some uncertainty surrounding the project from a Thai perspective. It is a large project and one that will need to be studied thoroughly,” Dr Wagner pointed out. “However, it is impossible to calculate the detailed impact until a feasibility study is conducted. Once that happens, the impact of the project will be known and we will also have a fact-based idea of how much it will cost.”
After more than 300 years of false starts, the Kra Canal just might yet become a reality. Dr Wagner believes a leap of faith is the only thing now needed for the project to navigate the choppy waters of uncertainty facing it.
“It is important for people to believe in the Kra Canal project and commit to it. Forget about the doubts. This is a project that both Thailand and the ASEAN needs. It is feasible and it is sustainable as long as everyone believes in it and acts accordingly,” Dr Wagner proclaims. Why it’s needed now
Experts such as Mr Pakdee Tanapura, Vice Chairman of ThaiChinese Culture and Economy Association and Head of the Kra Canal Study Team note that building the Kra Canal will solve two major issues: the struggling economy in the South of Thailand and the congested Straits of Malacca.
Opponents of the canal claim the project would cause further division in the conflict-plagued South since it will create a physical separation between Thailand and its southern provinces. However, those living in the South are championing the project as a way to improve the region’s economy which could possibly help end the conflict.
“Thai people, especially those in the South, agree that the Kra Canal is the kind of mega-project that will effectively stimulate economy due to massive investment, creation of jobs, new trades and development opportunities and development of new technologies it will bring,” Mr Pakdee notes. “I can tell you that a majority of Thai people in the South want it. It’s now up to the present Government to listen to the people.”
It is not just the people of the South eagerly watching how the Kra Canal plans develop. Businesses are also keeping an eye on the situation with the Straits of Malacca perpetually congested and nearing capacity. According to World Bank estimates, the passage could have as many as 122,640 ships passing through it, which would be above its estimated capacity of 122,000 set by the Maritime Institute of Malaysia.
Mr Pakdee believes the World Bank predictions to be a bit high, but predicts that capacity will be reached within the next 10 years. Without the Kra Canal, ships might need to divert their route, something that will cost businesses both time and money.
“If the Kra Canal is not completed on time, ships will have to go through Lombok Straits in Indonesia which is about 3800 kilometres away. That will for sure increase the shipping cost and logistics,” Mr Pakdde says. “Besides the Straits of Malacca are too shallow to accommodate modern vessels which are designed to become bigger and bigger to satisfy the expansion of trade between two oceans.”
Above left: A ship navigating the Panama canal. Above: Map showing various projections of the proposed Kra Canal.