As Thailand inches forward on its decades-old vision for a “logistics corridor” connecting the Pacific and Indian oceans, local opposition and political instability threaten the plans.
Wood Central understands the proposed 90-km highway-rail link would cut across the Malay Peninsula, connecting a planned port facing the Indian Ocean in Ranong province with another port planned for the Chumphon province, along the Gulf of Thailand and with a lane to the Pacific Ocean. A special economic zone would be established nearby.
Japan-based trade platform Nikkei Asia reports the mega-project would allow cargo to bypass the congested Strait of Malacca, a choke point sandwiched by Malaysia, Singapore, and Indonesia that is only expected to grow busier as Asia’s economy expands.
But the plan, says Nikkei Asia, threatens environmental devastation for Koh Phayam, a resort island famous for sparkling blue waters and coral reefs near the planned port in Ranong.
Meanwhile, Thailand’s US $2 billion forest and forest products industries, both export and domestic, will benefit significantly from the new port. The bulk of domestic wood supply comes from plantation species such as teak and eucalyptus, but also wood derived as a by-product of agricultural processes, such as mango and durian wood.
By far, the largest volume of this type of wood is rubber. Thailand is also a major timber importer from many countries, not only within the Asia-Pacific region but also from Africa, the EU and the Americas.
This is mainly processed into products that are exported again. The range of wood types and sources is broad and includes softwood from New Zealand and South America, high-quality species from Africa and the Pacific, and rubberwood and teak from Thailand’s neighbouring countries.
Nikkei Asia says the Thai government has told residents of Koh Phayam that the port will cover roughly 1000 hectares. Shipping lanes for giant bulk carriers would be established near the island, which involves digging into roughly 6400 ha of seabed – about twice the island’s area.
Despite concerns from the tourist industry, the government is forging ahead with the plans, keeping in mind the area’s geopolitical importance.
Proposals to build a canal crossing the Kra Isthmus, the narrowest part of the Malay peninsula, go as far back as the 17th century. In the 19th century, France sought to develop a Kra canal, which would have made Saigon in French Indochina a port city rivalling Singapore. In World War 2, the Japanese army used the Kra Isthmus to transport supplies to Burma, now Myanmar.
Plans for a land bridge fizzled out in the 1980s but were revived under Prayuth Chan-ocha, who led Thailand from 2014 to 2023. Srettha Thavisin took on the mantle when he became prime minister in September 2023.
The Thai government estimates that the land bridge will reduce the time to ship cargo between the Indian and Pacific oceans by an average of four days and cut transportation costs by 15%. Construction is planned in three phases, with the first slated for completion by 2030.
Ranong’s seaport is expected to process 20 million 20-foot equivalent units of containers a year by 2036. This would more than double the capacity of Laem Chabang, now Thailand’s largest port.
(Photo credit: Kosuke Inoue)
But, according to Nikkei Asia, businesses are cautious about participating in the project. The government frequently claims that multiple companies have expressed interest in developing the land bridge, but no company has yet made a serious bid.
Key hurdles include the project’s estimated cost of US $29.4 billion and the private-public format for the multi-million-dollar land bridge.
The government plans to award operating rights in decades-long increments. But a Japanese trading house executive said, “there is not enough data on expected demand and other factors to determine whether the financial returns will justify the massive investments. “
Neighbours Singapore and Malaysia have also expressed concerns that the land bridge would reduce the number of vessels transiting the Strait of Malacca, which has played a key role in the countries’ economic development.
Malaysia is building the East Coast Rail Link to connect ports on the east and west sides of the Malay Peninsula. The link, expected to open in 2027, would also compete with the land bridge project.
Thailand’s recent political upheaval could cause further complications. The Constitutional Court removed Srettha Thavisin from office on August 14. His successor, Paetongtarn Shinawatra, has yet to make a statement on the land bridge project.
The project could move away from realisation depending on the new government’s policies. Thailand has cancelled or postponed significant infrastructure projects since its government changed.
For infrastructure projects to attract investment amid such political instability, “there need to be guarantees that they won’t be discontinued over a change in government,” said Seiya Sukegawa, a professor of international economics at Japan’s Kokushikan University.
Editor’s note: The Thailand mass timber market is emerging as a promising segment within the construction and real estate sectors. Mass timber, including engineered wood products such as CLT, is gaining traction due to its sustainability, strength, and architectural versatility. Thailand’s commitment to sustainable construction practices aligns with the use of mass timber, and it has been adopted in various residential and commercial projects. With increasing awareness of environmental concerns and the desire for eco-friendly construction materials, the mass timber market in Thailand is poised for sustained growth.
