Kra Canal of Thailand

maggot SG · 2006-12-11T10:37:58+00:00

Folks u have forgotten that this canal is of strategic interest. I heard that PRC is in high favour of this proj and who noes, they may fund it in the future...

maggot SG

I heard that once built we will fall into a bottomless pit of darkness... Neutral

Most industries will close and move away...and so the story goes... Sad

Previous thread expired so I started this... Wink

Is it because of this that we have the IR Confused

So are we transforming into a "tourist attraction type" economy soon?

fudgester SG

I must doubt that the Thais would want to build the canal. At least, not in the near future.

With the current instability brought about by the military coup, not many foreign investors are going to sink their money into the project. Besides, the canal would most likely have to cut through the unstable and restive southern provinces.

lionnoisy SG

thailand map

who will take the high risk to finance the construction,taking into account
so many killings and bombs.....in Sothern Thailand.

2.Shipping depends on transhipments.No need to worry.Concentrate
the jobs in hands.u cant stop Thai to build the canal,anyway.

countdracula SG

if the thais were to build it alone….it’s unlikely given the unrest in the south, the southern provinces are mainly malay speaking muslims. so the next scenario is to do it with malaysia, which would be better as cost can be shared, then again, the issue over who has greater control would be something not easy to resolve. however, stranger things have happened before…..

borgkilla SG

once the Thai's get their act together , then worry about the canal Wink

Marco_Simone SG

I have heard of this opening of the kra canal thingy since I was in pri sch. My social studies teacher told us about this.

That was way back in the 1980s. Wink

So what's new???

sunny6110 SG

I nv study one leh… Share the story?

Herzog_Zwei SG

Like the Suez Canal, the question is when. Meanwhile don't lost sleep over it.

Gackt247 SG

100% sg financing of the canal.. 100% ownership of the canal lor.. Mr. Green

4getmenot SG

u think after the shin corp saga.. they won;t go through thorough inspection of its investors to see if they can sniff out any scent of tomasick meh? besides, i think if the canal is held in such high aspect, i doubt the thai governement would not want a big slice of it first..

Herzog_Zwei SG

Read up what happened to the Suez Canal, Gackt247. You will be surprised that all the financers of the Suez Canal were screwed by the Egyptian Government in the end.

sbst275 SG

Seriously… As again, Laem Chabang is way too far for the Aussie – South East Asia rt…

Kenashi SG

Not likely to happen.
too many uncertainties, the huge cost outlay, the political unstability.
the thais talked about it for a few decades n nothing has been done, i don't think it will happen.

lotus999 SG

a friend sent me a latest update on the canal:

Venice of the East to resurface?
Imran Imtiaz Shah Yacob, Malaysiakini
Nov 17, 06 12:07pm

The proposed Kra Canal fascinates the mind. The limits of human imagination are only bound by our very own mortality. Since the early civilisations and throughout the ages of human annals, we have achieved the apparently insurmountable and survived the unendurable. The earths physical features have been re-designed and re-engineered to suit mankind.

It is not a novel idea and the Isthmus of Kra which is a narrow land bridge that connects the Malay Peninsula with the mainland of Asia has been in existence for generations. The eastern part of the land bridge belongs to Thailand; the western part belongs to the Thanintharyi division of Myanmar. To the west of the Isthmus is the Andaman Sea, to the east is the Gulf of Thailand. The Isthmus gets its name from the city of Kra Buri, in the Ranong province of Thailand. Thus, the Isthmus of Kra by divine design connects us to each other and with the rest of the world.

King Narai the Great whom presided over the Golden Age of Siam had the foresight when he officially established diplomatic channels with foreigners. He had commissioned the French engineer de Lamar to survey the possibility of building a waterway to connect Songkhla with Mranma (Myanmar). Three centuries later the Kra canal is still intensely debated.

The 21st century may yet see Thailand opening up further to foreign participation. Ever rising oil prices, security issues, and the rise of China warrant this colossal project.

Recently, at two separate seminars involving the Armed Forces of Thailand, businessmen, academics and bureaucrats; a consensus in favor of the Thai canal Project emerged. The Royal Thai Navy leads the band of supporters as it hopes to re-establish its influence. Captain Soonpuen Soomaphi, spokesman of the Royal Naval Academy said:The Thai Navy must take the lead, because Thailand is on both the Indian and Pacific oceans, and we have to realise our sea power and exercise it. Thus renewed political and economic interests will give life to this antiquated idea.

The total project cost is astounding. Numerous parties have offered to foot the bill but the government has the burden of responsibility to ensure that the process stands up to public scrutiny. Some have called it the mother-of-all-mega-projects with a never-ending story. Allegations of manipulation and corruption as well as economic downturns have stalled the construction of the canal.

The 1997 financial crisis plunged the Thai economy into debt with the IMF. Needless to say that the canal project was put aside only to resurface now in prosperous times for Thailand. Present day estimates put the cost of construction of the canal at approximately US$23 billion.

Deeper implications

Enter China. The construction of the canal has deeper implications for the global order as a new superpower rises. Chinas ascent hinges on her re-assertion of her maritime power. In the words of Zeng He Admiral of the Western seas.

We have beheld in the ocean huge waves like mountains rising sky-high, and we have set eyes on barbarian regions hidden away beyond a blue of light vapors, while our sails, loftily unfurled, day and night continued their course like that of a star, traversing the savage waves as if we were treading a public thoroughfare. (Louise Levathes, When China Ruled the Seas, The Treasure Fleet of the Dragon Throne, 1405-1433, Oxford University Press, 1996, pg. 75).

The string of pearls theory conceives the setting up of strategic military and diplomatic bases along the major sea lanes stretching from the South China Sea to the Middle East. Power projection is what it is all about. The United States Military reports that Chinese posturing by militarily controlling oil shipping lanes via the Kra canal would lead to a climate of uncertainty.

The Thai government however is more than happy to receive the Chinese as they pledge to underwrite more than US$20 billion for the Kra canal construction costs. China has even put the establishment of Chinese port facilities on the cards. Evidently the Thais are eager to play a role in the geopolitical game. The suspended free trade agreement talks with the United States and the recent coup detat in which the United States has cancelled millions of dollars in military aid to the Kingdom all make having an ally in China good sense. Hence the waterways of the Kra canal are the bloodstreams of an emerging beast.

The Straits of Malacca through which a third of the worlds trade and half of its oil passes is the center of a heightened geopolitical struggle in the post Sept 11 era. The United States had at one point considered deploying special forces on high-speed vessels along the Straits to prevent piracy and terrorist threats. If the statistics of the Piracy Reporting Center of the International Maritime Bureau (IMB) are anything to go by then the justification for the Kra canal gets a bonus point. Proponents of the Kra canal argue that it would save up to between 3-4 days sailing time by avoiding the Straits of Malacca therefore benefiting the global economy. This would result in Malaysia and Singapores port operations being seriously affected as observers note that the Straits would in time become a sleepy backwater.

Thailands burning south is the other problem. The Muslim separatists once largely ignored by Bangkok and the majority of Thais have had the consequential effect precipitating the fall of Thaksin Shinawatras government. Thus, the relentless explosions, fighting and unrest there has prompted the Thai government to look further north than Ranong. The relocation of the canal from the heart of the troubled region thus poses a catch-22 scenario for the Thai government. The new secure site would ultimately deprive the southern Thai Muslims of economic prosperity and community development that has so far eluded them, resulting in possible expanded clashes in the entire south.

Whatever the challenges, the importance of and pressing need for the canal to Thailand is evident. This time conditions may just be right for the Kra Canal.

IMRAN IMTIAZ SHAH YACOB is a broadcast journalist and a lawyer.

googoomuck SG

From an economic point of view, the project is costly. Can Thailand go ahead alone or require foreign investment? The Europe Middle East and Far East route is crucial to China and Japans economy. So the project benefits China and Japan more than Thailand. China and Japan are very willing to finance the project Of course in return they want to have more say in the running of the canal. However Thailand sure wants full sovereignty. China and Japan are also trade rivals. Can they reach a compromise?
If the project becomes a reality, the result is a saving of 2 -3 days voyage around the Malaysian peninsular. If compared to using suez canal , a ship can save more than 10 days sailing around the African continent.
Is the consequent saving in fuel cost and time substantial enough for ships to ungrudgingly pay the toll charges levied by the Kra canal? Ship operators will still consider Malacca Straits because its free.
An estimate for the investment to break even, between 50-65 years.

Ponders SG

Thailand mooted the idea in the 1980s once...

but our Old Man went over to advice them the complications...

Spirit of Fire SG

Let me quote a scenario:
In 1900, if u tell the whole world that u want to travel to the moon, they'll tell u that u're crazy. And here we have, in 1969, finally someone step onto the moon.

What's the moral of the story: Nothing is impossible, & anything can happen.

Maybe we won't be able to see the Kra Canal built in our lifetime, but our future S'poreans will definitely get the chance to be awed by it.

countdracula SG

if the day would ever come, sg may have already lost the strategic advantage it has now. just like air hubs, planes are now flying faster and longer, transit hubs are now losing its shine…

gd4u SG

Seriously, what makes u think we have such good relations with Thailand for?
Like one phrase goes 'there is no permanent friendship, only permanent interests' . And sadly, our interests is to prevent the idea becoming a reality. I am not surprised if Malaysia and Singapore protest against it. With the idea of a 'unified' ASEAN becoming more of a reality, i guess, the Kra would just continue to be an idea.

The military coup in Thailand calls for a 'self-sufficient' economy in the future, what that will signify, we never know. But i guess, that line of thinking will keep Kra Canal into the last of the priority.

maurizio13 SG

This is a massive project, if they decide to do it, it might take 5-7 year to complete, not to mention alot of relocation for houses caught in it's path. This project is going to run to at least USD 5.0 billion mark.

In my opinion, I do not think it's a worthwhile venture like the Suez Canal or the Panama Canal, because without Panama Canal, you will have to take a long trip under Cape Horn to traverse the continent of America; without Suez Canal. you will have to traverse the Cape of Good Hope, then make a turn at Gilbratar to reach the Mediterranean Sea. Both of these 2 sea journeys are costly in terms of fuel and duration; that's why the Panama & Suez Canal are worthwhile ventures.

For the Kra Canal, the other alternative to paying toll is to make a slightly longer trip along the straits of malacca. Do you think it's more economic to travel the straits of malacca or pay USD 178,420 (based on Suez Canal charges), for the right of passage through Kra Canal?

http://en.wikipedia.org/wiki/Suez_Canal

Receipts from the canal July 2005 to May 2006 totaled $3,246m. In 2005, 18,193 vessels passed through the canal.

USD 3,246,000,000 / 18,193 vessel = USD 178,420 per vessel

With Panama Canal, the average toll was around USD 54,000.

If they borrow USD 5,000,000,000 with an interest rate of 5% to build the canal, they would need to pay interest charges of USD 250,000,000 per year.

They would need at least 5,000 freighters paying toll of USD 50,000 just to cover the interest charges.

In financial terms, it's not an investment with positive net present value.

Do more analysis with reliable data from other sources.

Don't believe everything they tell you, they use scare tactics to frighten you into compliance.