Thailand offers $28 Billion game-changing sea route to link Asia-Pacific with India, Middle East

Thailand offers a multi-billion-dollar project that will significantly shorten the duration of Indo-Pacific shipping, avoiding the Strait of Malacca, one of the world’s most active shipping lanes.

Thailand’s Prime Minister, Srettha Thavisin, briefed investors in San Francisco on the project, stressing that it would shorten the duration of the trip by an average of 4 days and reduce the freight cost by 15%. With traffic expected to exceed the Strait’s capacity by 2030, the new project would ensure a smooth flow of goods.

The cost of the project, called “Landbridge”, will be close to 1 trillion baht ($28 billion) and includes the construction of two ports on both sides of the peninsula in the south of the country, connecting them to highway and rail networks, according to the government. The 100-kilometer (62-mile) link road will replace Thailand’s decades-old proposal to dig a canal through the “Kra” isthmus.

The Strait of Malacca, a narrow shipping corridor between Malaysia and Singapore, is the shortest sea route linking the Asia-Pacific region to India and the Middle East. It passes through about a quarter of world trade and will become increasingly active, raising shipping costs, according to Sritha, which indicated more than 60 maritime accidents per year in the shipping corridor.

“Landbridge will be another important route to supporting transport, and it will be an important option to solve the Strait of Malacca’s problems. It will also be a less expensive, faster, and safer route,” Srettha Thavisin said.

“The western port would be able to handle 19 million equivalent units per ton, while the eastern port was designed to handle 13.8 million units, together representing about 23% of the total cargo in the port of Malacca,” he added.

Srettha said he had also offered the project to investors in China and Saudi Arabia over the past few weeks and that the project would help create 280 thousand jobs, raising Thailand’s annual economic growth rate to 5.5% upon completion.

Southeast Asia’s second-largest economy grew by 2.6% last year and is expected to grow between 2.5% and 3% in 2023.