Fact Sheet on Kra Canal Project in Thailand

Kra canal fact sheet     (see also the website http://www.kracanalmaritimesilkroad.com/)

Compiled by Dr. Jonathan Tennenbaum,  November 2014

Transit through Straits of Malacca (SOM)

An estimated $1 trillion in goods is shipped through the Straits of Malacca and Singapore 2013, corresponding to an average of over $2.7 billion each day.   

The yearly estimate of $1 trillion includes a large part of:

China’s merchandise trade with Europe ($428 billion in 2013), with the Middle East countries ($238 billion in 2013) and with Africa ($210 billion in 2013);

  • Japan’s merchandise trade with  Europe ($168 billion in 2013), with the Middle East ($187 billion 2012) and Africa ($31 billion 2012);
  • Republic of Korea’s trade with Europe ($76 billion 2013), with Middle East countries ($124 billion 2013), with Africa (approx $20 billion 2013).

Nearly all of this is transported by ship through the Straits of Malacca.

  • 15.2 million barrels a day (2013) of oil pass through the Straits of Malacca
  • 4.2 trillion cubic feet (Tcf) of natural gas

The Strait of Malacca carries 80% of the oil imports of China, Japan and South Korean. China is dependent on imports for 52% of its oil consumption,  Japan is 97% dependent on imported oil, and South Korea is 98% dependent.

Approximately 127 000 ships passed through the Straits of Malacca and Singapore in 2013 (348 ships per day, one about every 4 minutes). Of these, 77973 were vessels of 300gt (gross tons) or more (213 ships per day, one every 6.7 minutes).

At present there are no economically viable alternatives to the Straits of Malacca for trade between China, Japan, South Korea and the EU, India and the Gulf states.  The two immediate alternative routes are through the Sunda and Lambok Straits, but:

Sunda Strait:  1600 km additional distance -- 3.2 km wide at narrowest point, only 18 meters deep, shallow, narrow strait proves to be a “navigational nightmare” for larger vessels like VLCCs.

Lambok Strait:  2960 km additional distance -- relatively easy to navigate 18km wide, about 250 metres deep. Even ULCCs can use this route (while they cannot navigate the Malacca). However, since using the strait as an alternative to Malacca adds a lot of distance, it is much less frequently used. Rerouting would greatly increase shipping cost that would directly affect the price of transported goods. For example, rerouting tanker ships in the Middle East Japan route from the Malacca Strait to the Lombok Strait would burden US$ 340,000,000 per year for Japanese oil industries.

In comparison, the Kra canal will be more easy to navigate than all three straits, and will reduce the shippingdistance by about 1000 kilometers.

Physical limitations and hazards to shipping in Straits of Malacca and Singapore

At the narrowest point (Phillips Channel) only 600-800 m wide, depth in some places is less than 25 meters.

The situation in the Phillips Channel is aggravated by numerous sunken ships and shoal patches, a sea current that could reach more than 2.5 knots with irregular speed changes, shallow seabed that is dangerous for heavy tankers, and unpredicted strong rain and wind. Local fishermen also conduct fishing activities along some parts. Haze due to plantation and forest fires periodically reduce visibility, creating a further danger to navigation in the straits. 

Present Very Large Crude Carriers VLCCs often have draughts of more than 20 meters. They are required to use a very narrow “deep water route” through the Phillips channel, which is only for eastbound (west to east) vessels (tankers and VLCCs are mostly empty on the return route).

But as a result of growing trade there is an increasing number of large container ships travelling westbound (from east to west), increasing the risk of head-on collisions.

The Straits are constantly crossed by large numbers of ferries (estimated at 26000 crossings per year), plus large numbers of trading boats and fishing boats.

In the future, as a result of economic development of the regions along the Malacca Strait, the cross-strait traffic will become much bigger.

It has been proposed to link the two sides with a 48.7 km-long bridge + 71.2 km highway going from the Indonesian port-city Dumai to Teluk Gong on the Malaysian side. This bridge could take part of the cross-straits travel , but it could slow down traffic through the straits and pose an additional danger of accidents. 

Accidents + damage to environment

Shipping accidents pose an increasing danger to the environment and surrounding population of the Malacca and Singapore Straits, due to transport of large amounts of oil, liquefied natural gas (LPG) and toxic chemical substances.

Many accidents are not reported because ship companies want to keep the insurance rates low. 

Reported major accidents are mainly concentrated in the Singapore straits because of high density of traffic. Until last year the number decreased: 

2011: 13 major accidents
2012: 8 major accidents
2013: 6 major accidents

But at the beginning of this year the frequency of major accidents appears to have increased again, raising alarm in the shipping community. Already between December of last year and the first two months of this year there were 3 serious accidents with oil spills. The statistics are not complete for this year, but an additional serious accident occurred in September with the collision of two cargo vessels in the Singapore Strait. There was a collision of two container ships with fire in the Port of Kelang on the Strait of Malacca, on October 28.

The table below  shows examples of some major accidents in the Straits of Malacca and Singapore since 2001, nearly all resulting in oil spills or release of chemical substances into the waters.

2001

May 28

Malacca Strait

An oil tanker with some 67 tonnes of fuel, including diesel and 1,500 tonnes of bitumen, sunk after it was crashed from behind by a super tanker. The crash caused MT Singapura Timur to take in water, and remained half-submerged in the sea, diesel and bitumen spillrf into the sea.

2001

June 13

Malacca Strait

An Indonesian tanker laden with 600 tonnes of the poisonous industrial chemical phenol and 18 tonnes of diesel capsized off Malaysia, just across from Singapore, producing a toxic spill. Singapore authorities have also warned its citizens to stay away from nearby waters.

2002

June 12

Singapore Strait  

A collision between Thailand-registered freighter MV Hermion and Singapore-registered bunker tanker Neptank VII caused about 450 tonnes of marine fuel oil to spill into the south-eastern waters of Singapore.

2002

December 5

Singapore Strait

A small general cargo vessel collided with a heavily-laden single-hulled tanker, causing  a potentially disastrous crude oil spill.

2003

June 12

Singapore Strait

The MV APL Emerald, a 40.077 ton container ship, spilled about 150 tonnes of fuel oil when it ran aground in the eastern approaches of the Singapore Straits.

2009

August 18

Malacca Strait

Liberian-registered oil tanker carrying 58,000 tons of naphtha collided with a British bulk carrier resulting in a massive explosion. A firefighter reported: "We could not approach the tanker due to the intense heat. In fact we could feel the heat 5 kilometres away from the burning ship,"

2010

May 25

Singapore Strait

Bunga Kelana 3 collided with the bulk freighter, MV Waily. An estimated 2000 tonnes of crude oil were spilled into the sea.

2013

March 3

Singapore Strait

Turkish bulker Beks Halil collided with bulk carrier

2013
December 19

Singapore Strait

The container ship Hanjin Italy collided with the 314 m long Al Gharaffa off Singapore. The bow of the Al Gharrafa was significantly damaged

2014

January 19

Singapore Strait

Fei He, a China-flagged containership collides with Lime Galaxy, a Hong Kong-flagged chemical tanker, causing a spill of fuel oil.

2014

February 10

Singapore Strait

Collision between the Liberia-flagged containership Hammonia Thracium and Panama-flagged chemical tanker Zoey, causing an  80 ton bunker oil spill. Third collision in as many weeks. The incident occurred just as efforts to clean oil spills from two previous incidents were completed.

 

2014

September 12

Singapore Strait

Bulk carrier Southern Explorer and cargo vessel Best Unity collided in the Singapore Straits. The vessels were in opposite directions – the Best Unity was en route from Taiwan while Southern Explorer was heading to Taiwan fully laden. Both vessels were damaged significantly. Southern Explorer was breached and suffered water ingress.

2014

October 28

Malacca Strait

Collision of container vessel ‘San Felipe’ with the container vessel ‘Al Riffa’ at Port of Kelang resulting in a fire in a container stack on the forward sections of both vessels.

Besides major accidents, there is constant pollution and releases of smaller amounts of oil and chemicals into the Malacca and Singapore Straits, causing a degradation of the environment.

70 % of Malaysia’s fishermen are concentrated along the coastline and islands in the Straits, catching more than 380,000 tons of fish every year with a value estimated at US $320 million. Many of Malaysia’s marine resorts and tourist spots are located along the Straits.

Piracy

The Malacca Straits offer ideal conditions for pirates

  • 730 kilometer-long shoreline with a large number of islands for hiding, providing  places where pirates can retreat.
  • Large number of ships with high value cargo and other valuables on board. Now pirates are often equipped to siphon off large amounts of oil.
  • Slow-moving tankers and cargo ships are easy to spot and chase down.
  • Pirates can quickly retreat into national waters where pursuers cannot follow.
  • Shipping companies are reluctant to report the incidents, which can cause costly delays or push up insurance rates.

In the past the Malacca Straits was one of the most dangerous areas in the world for piracy. In 2004 there were 38 actual or attempted attacks. After that great efforts were made by the littoral nations to combat piracy, resulting in a drastic decrease. But recently there has been a huge increase in piracy:

In the first three months of 2014 there were already 16 piracy attacks in the Malacca Straits.
 

Piracy in Malacca Straits in 2014 – an example

On April 23, 2014 armed pirates raided a Japanese oil tanker Naninwa Maru in the Strait of Malacca, pumping millions of litres of diesel and taking three crew members hostage, according to Malaysian maritime police.

Six pirates used a speedboat to approach the Naninwa Maru vessel before boarding off the coast of west Malaysia. “It was only realised by the crew members when they saw about five or six men armed with a pistol and a machete aboard the ship," according to the police commander of nearby Port Klang.

The assailants proceeded to pump over 2.5 million litres of diesel being transported by the tanker into two waiting vessels before taking three Indonesian men hostage.

 

Piracy not only causes economic losses and loss of life, but can also lead to large-scale accidents, as demonstrated by the following example from the 1990s:

A collision between the container ship Ocean Blessing and the hijacked tanker Nagasaki Spirit occurred in the Malacca Straits on 19 September 1992. Pirates had boarded the Nagasaki Spirit, removed its captain from command, set the ship on autopilot and left with the ship's master for a ransom. The ship was left going at full speed with no one at the wheel. The collision and resulting fire took the lives of all the sailors of Ocean Blessing. The fire on the Nagasaki Spirit lasted for six days; the fire aboard the Ocean Blessing burned for six weeks.

Threat of terrorist attacks – a maritime version of 9/11 ?

The huge global strategic importance of the Malacca and Singapore Straits and their natural conditions, make them ideal locations for spectacular acts of terrorism. Particularly since the 9/11 attack on the World Trade Center in New York, there has been much discussion of possible scenarios for such an attack.

 For example, in April 2004 Singapore Defense Minister Teo Chee Hean warned: “It is entirely possible that terrorists could resort to pirate tactics to hijack supertankers or chemical carriers. They could sink these large vessels in the choke-points of busy international straits or even turn them into floating bombs…” In September of 2004 reports surfaced that U.S. intelligence had intercepted communications between members of the Jemaah Islamiah (JI) members discussing plans for such an attack.

Although unconfirmed, the reports of terrorist plans caused big international concern and led the Joint War Committee (JWC) of Lloyd’s Market Association to declare the SOM a “war risk area,” alongside Iraq, Lebanon, and Nigeria. Insurance premiums for supertankers that same year rose to about US$63,000, with a US$12,600 transit fee per transit through the Straits of Malacca.

The JWC removed the SOM from its war risk list in August 2006, after intense lobbying from the littoral states and an improvement in the maritime security environment through increasing patrols. But even a relatively minor terrorist incident could cause insurance rates to rise again.  It has been pointed out that even local groups could construct simple anti-ship mines and deploy them in the Straits.

The worldwide trend of a symbiosis between piracy and terrorism, and the growth of Muslim extremism increase the probability of terrorist incidents in the Straits of Malacca and Singapore. 

Just recently there has been a new flurry of discussion about a possible “mega-attack” in the SOM. Here is an example:

When 35 pirates carrying machine guns and rocket launchers boarded a tanker laden with methane in the Malacca Strait in March, it sent a shudder through the crew, and a ripple of fear from Tokyo to Washington.  But in the nightmare scenario, terrorists using the methods of modern-day pirates seize a gas tanker and use it as floating bomb, which experts say could explode with the force of a small nuclear weapon.

(5.11.2014 NBC News)

If one or more large tankers or container ships were sunk at a narrow point in the Straits, this could lead to a substantial or total blockage, with huge geopolitical, financial and economic consequences. Even if the blockage were for a short time, it would almost certainly create a panic on the world financial markets.

Growing cost burden on littoral states and users, growing pressure to limit shipping traffic in the straits

The necessity of providing security against pirates and terrorism and providing for safe navigation for an increasing density of ships – navigational aids, systems for monitoring ship movements etc. – and cleaning up pollution is placing a growing financial burden on the littoral states Malaysia, Indonesia and Singapore.  Already in 2005 Dr. Mahathir Mohamed, Former Prime Minister of Malaysia, declared:

“While foreign countries consider the Straits of Malacca as international waterway, they are unwilling to bear the cost of keeping the waters clear of pollution, in particular oil, which affects the shores of our country”   (Speech at IKMAL Honorary Fellowship Award, Kuala Lumpur, 20.3.2005)

The growing financial and environmental costs of the SOM traffic has given rise to demands to limit the number of ships passing through the Straits. In 2008 for example, the call to limit was voiced by the then-Deputy Prime Minister of Malaysia (now Prime Minister) Najib Razak:

KUALA LUMPUR: The number of vessels plying the Straits of Malacca will need to be capped to ensure safe navigation, Deputy Prime Minister Datuk Seri Najib Tun Razak said. He said the capacity of the strait to assimilate increasing vessel traffic was finite. He said Malaysia believed that the ship-carrying capacity would have to be jointly determined by the littoral states, and the set limit must not be exceeded.

“Malaysia believes there is an ultimate ‘tipping point’ for maritime traffic in the strait beyond which further increases will become not only risky but also too dangerous and costly “. At such point, the cost to ensure safety of navigation will also increase exponentially,” he said in his keynote address at the launch of the Maritime Institute of Malaysia (MIMA) Centre for the Straits of Malacca… Najib added that there was a limit to what the country could afford given the long-term financial implications. (October 22, 2008, The Star Online)

The possible basis in international law for a limit on the ship traffic through the SOM was discussed in the paper: The legal feasibility of the imposition of a traffic limitation scheme in straits used for international navigation: a study of the Straits of Malacca and Singapore, Mohd Hazmi bin Mohd Rusli, International Journal of Humanities and Social Science Vol. 1 No. 6; June2011.

 

Benefits of the Kra Canal   

The Kra canal would provide an urgently needed alternative for:

  • defusing the dangers and tensions deriving from the “choke point” status of the Malacca Straits;
  • handling the tremendous increase in East-West maritime trade flows which is projected to occur in the coming decades;   (even a growth rate of 3.5% yearly would mean a doubling of shipping traffic over the next 20 years!) 
  • contributing decisively to long-term development and prosperity for the entire region stretching from India and the Bay of Bengal to the ASEAN nations, China, Japan and Korea (see below).
  • giving a tremendous boost to Thailand's own economic development, particularly when the Kra canal project is combined with the development of a system of North-South/East-West transport corridors inside the country, and with the construction of large harbors and industrial parks at both ends of the canal. Positive effects will begin already in the process of building the Kra canal itself (see accompanying article) 
  • greatly reducing logistics costs inside Thailand itself (see accompanying article). 
  • bringing development to the Southern provinces of Thailand. 

It is important to note that these benefits of the Kra Canal go far beyond simply providing an approximately 1000 kilometers shorter route between Europe, Africa and East Asia. Also, the Kra Canal will not replace the Straits of Malacca; they are complementary, and both will be needed in the future to handle the growing shipping traffic in a safe and optimal way. Indirectly the Kra canal will benefit Singapore, Malaysia and Indonesia by triggering an acceleration of economic development and trade in the entire region.

The following table identifies crucial advantages of building the Kra canal from the standpoint of the problems and limitations of the Malacca Straits identified above.

Issue

Malacca Straits

Kra canal advantages

Physical hazards

 

Narrow, shallow depth, shifting sands, reefs, currents, visibility problems, increasing density of ships, cross-straits traffic

Ample depth, no reefs, stable bottom, no cross-currents, no cross-traffic, simple navigation, easy monitoring and control of ship movements

Limits on ship size

Ship size limited to Malaccamax maximum length 400 m, beam 59 m and draught 14.5

Could permit much larger ships

Accidents

 

Frequent accidents connected with high density and uncontrolled movement of ships in various directions, cross-traffic, etc.

Accidental collisions essentially ruled out, straight-line motion of ships, no cross-traffic

Oil spills and other environmental damage

 

Frequent oil spills through accidents, piracy. Oil and other substances can spread over very large area, clean-up difficult. Threat to fishing

Much easier detection, control and clean-up of leaked substances; limited area of spread. No threat to fishing or other economic activities.

Piracy and terrorist acts

 

International waters easily accessible to attackers; very long coastlines and large sea area difficult to control; many potential hiding places. Shores belong to different countries

Sovereign territory of Thailand, within a narrow militarily controlled area; easy surveillance and very short reaction times by security forces; piracy ruled out; terror acts much more difficult.

Insurance costs and costs of security and navigational infrastructure

A serious terror attack could trigger much higher insurance costs; security and navigation infrastructure a major burden on litteral states who demand burden-sharing 

Navigation extremely simple and low-cost, much smaller costs for security. Low risk means low insurance premiums.

Possibility of limitation on ship traffic

Littoral states (Malaysia, Indonesia) may demand a maximum limit on numbers of ships

Provides the ideal means for handling a constantly growing ship traffic, far beyond the limitations of the Malacca Strait alone.

Vulnerability to deliberate blockages

Potential for blockage a recent subject of detailed military strategy studies.

Kra canal adds an alternative route in case of blockage of Malacca Straits. Deliberate blockage of the Kra canal has political penalties because of sovereign territory of a single nation

Transport time

Danger of delays due to increasing congestion and difficult navigation.

Substantial savings in transit time and costs of transport due to smooth traffic flows and shorter route compared to the Malacca Strait.

Economic cooperation organizations and the Kra Canal

The Kra Canal fits perfectly into a whole network of organizations and initiatives for regional economic cooperation:

Maritime Silk Road initiative of China

ASEAN – Association of Southeast Asian Nations (Indonesia, Malaysia, Philippines, Singapore, Thailand, Brunei, Cambodia, Laos, Myanmar, Vietnam)

ASEAN + 3 (ASEAN + China, Japan, South Korea)

MPAC - Master Plan on ASEAN Connectivity

 “Look East” policy of India

“Look West” policy of Thailand

BCIM - Bangladesh-China-India-Myanmar Forum for Regional Cooperation  

MIEC - Mekong-India Economic Corridor

MGC Mekong-Ganga Cooperation (India, Cambodia, Lao PDR, Myanmar, Thailand, Vietnam) 

BIMSTEC - Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (Bangladesh, India, Myanmar, Sri Lanka, Bhutan, Nepal)

SAARC - Southeast Asian Association for Regional Cooperation (Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, Sri Lanka)

BIMP-EAGA - East ASEAN Growth Area (Brunei, Darussalam-Indonesia-Malaysia-Philippines)  

The Kra Canal promotes the China-India “development axis”

In the recent period there has been more and more discussion about geopolitical competition and even a future military confrontation between the two “giants” of Asia, India and China. The U.S. and other outside forces are evidently working to play the two giants off against each other in new version of Britain’s “Great Game”. It would obviously be very stupid for India and China to fall into this geopolitical trap and it would be a disaster for the whole region. 

The alternative is a “win-win situation” in which all sides benefit through rapid economic development and integration, through multilaterial cooperation in large-scale infrastructure projects, industrial projects and high-technology projects. China and India are already taking the lead in promoting infrastructure development throughout the region.

The Kra canal is a crucial contribution to this process, and will allow Thailand to play a key role in harmonizing interests and making the “China-India motor” work for all.

Port developments

The Kra canal will greatly stimulate the expansion of trade between East Asia and the nations around the Bay of Bengal (India, Sri Lanka, Bangladesh, Myanmar, Thailand), as well as stimulating the economic development of the Bay of Bengal region.

In this context, the Kra canal will increase the importance of a chain of major ports along the Bay of Bengal and extending via the Kra canal to the coast of Vietnam and China.  Especially the ports along the coast of the Bay of Bengal, which are in a directly line with the western exist of the Kra Canal will benefit from the much shorter shipping route to East Asia, which will shift the whole dynamic of development in their favor.

Besides new port developments at the Eastern and Western ends of the canal itself, the Kra canal will promote current plans and projects to upgrade ports along the whole chain, including:

Ho Chi Minh City Port (Vietnam)

Cai Mep- Thi Vae Port Complex  (Vietnam)

Songkla Port (Thailand)

Laem Chabang Port (Thailand)

Chieng Saen Port (Thailand)

Ranong Port (Thailand)

Dawei Port (Myanmar)

Kyaukphyu Port (Myanmar)

Yangon Port (Myanmar)
Chittagon - Sonadia Island Port (Bangladesh)

Mongla Port (Bangadesh)
Sittwe Port (India)

Calcutta Port (India)

Paradip Port (India)

Chennai-Ennore  Port (India)

Visakhapatnam Port (India)

Tuticorin Port (India)

Hambantota Port (Sri Lanka)

Kankesanthurai  port (Sri Lanka)

Complementing other large-scale infrastructure projects in the whole region

The construction of the Kra canal will increase the overall connectivity of the region and amplify the economic effect of a variety of large-scale infrastructure projects. Here are some examples:  

Trans-Asian Railway network

“Energy land bridge” - 260-km. trans-Kra pipeline

Myanmar-China Oil and Gas Pipeline

China-Pakistan Economic Corridor ( Kashgar in China to Gwadar Port in Pakistan, with 1800 km rail line)

India – Myanmar – Thailand Trilateral Highway (TH)

SKRL Singapore Kunming Rail Link

Kaladan Multi-Modal Transit Transport Project in India

New corridor India‐Myanmar Myanmar‐Lao PDR‐Viet Nam‐Cambodia

Delhi – Hanoi Railway Link

International voices in favor of the Kra Canal – a sampling

An earlier study by the Japanese Global Infrastructure Fund (GIF) concluded that the Kra canal would generate an estimated annual trade turnover of some US$280 billion, and provide better access to about 1.2 billion consumers that straddle the region within a radius of 2,400 kilometers. It would cut 1,000 kilometers off current shipping routes through the Straits of Malacca, saving about US$37,000 to US$120,000 to shipping companies per voyage in labor and fuel costs.

The Diplomat Magazine (December 01, 2013).

The Kra Canal would deeply transform the strategic and economic landscape of the Asia-Pacific region. …, Myanmar, Cambodia, and Vietnam would benefit greatly from the Kra Canal. However, the project would be an opportunity and platform for Southeast Asian countries to conduct mutually beneficial trade cooperation. Politically, India, Japan and China should be interested in developing such a canal since they would contribute capital and political leverage in putting this old idea into practice.

MalayMail ( June 28, 2013 Proposed Thai canal project: Between myth and reality by Mohd Hazmi Mohd Rusli)
Diversion and reduction of shipping traffic that goes through the Straits may alleviate their accommodation of unlimited shipping traffic. Less shipping traffic will simultaneously address issue of piracy and other maritime crimes in the Straits of Malacca and Singapore. This will then assist to reduce littoral States’ expenses on maintaining navigational aids and infrastructures along the Straits.

The well-being of the marine environment of the Straits of Malacca and Singapore could be better managed and these Straits could be further developed as a fishing hub for the region. With less navigational traffic plying these Straits, littoral States may propose additional environmental protective measures in the Straits such as Special Areas under MARPOL and/or designating them as Particularly Sensitive Sea Areas (PSSAs) under the IMO, conceivably, without as many objections from other user States. 

OECD  March 2012 

TRANSCONTINENTAL INFRASTRUCTURE NEEDS TO 2030/2050

MUMBAI GATEWAY AREA CASE STUDY

OPPORTUNITIES AND CHALLENGES

The Mumbai Gateway area… is expected to be a beneficiary changes of the improved and higher frequency services also the major trade routes in its vicinity – especially between Asia/South Asia, the Middle East and Europe. It could also be affected by new maritime projects in the Asia/South Asia region.

Two new maritime projects, if developed, could have significant effects on the trans-shipment business for India, which is largely shared by Colombo and Singapore Ports: These two projects are:

1. Sethusamudram Shipping Canal Project at the southern most tip of Indian sub-continent; and

2. the Kra Canal …

The Thai Kra Canal would make Sri Lankan ports like Trincomalee, Hambantota Harbour or Oluwil, competitive as trans-shipment hubs, as they would be positioned directly in line with the Thai Kra canal.

Trincomalee, with 25 metres draught, would benefit significantly from both the Thai Kra Canal and Sethu Samudram, as feeders from Tuticorin in India could connect cargo to super container ships at Trincomalee. Trincomalee could also connect ports like Chennai, Ennore, Paradip, Kolkata and Chittagong in Bangladesh as a trans-shipment port. Further, resumption of rail connections from Trincomalee to Southern India through Danuskody would offer another outlet for Indian cargo.

 

Thai, V. V. & Grewal, D. (2005). An analysis of the efficiency and competitiveness of Vietnamese port

system. Asia Pacific Journal of Marketing and Logistics, 17(1), 3-31.

If the project of Kra canal of Thailand, which cuts across the Kra Isthmus in southern Thailand and enables shipping to bypass the Strait of Malacca and head directly into the South China Sea and vice versa, is feasible, ports of Vietnam, especially those in the south may well find themselves in

advantageous locations (Kra Canal Project, 2003). If this happens, the issue of efficiency and

effectiveness of Vietnamese ports is even more critical.

 

At present, ports in Vietnam do not have the advantage of geographical location nearby

Malacca strait that ports of Singapore and Malaysia experience. However, if the project

of Kra canal of Thailand that connects Gulf of Thailand and Indian Ocean is feasible, the

vessels from Europe to Asia – Pacific will not have to go through Malacca Strait and

Singapore but head directly into South China Sea and vice versa. If this happens, ports of

Vietnam, especially those in the south may well find themselves in advantageous

locations (Kra Canal Project, 2003). VanPhong port in the centre of Vietnam will be the

first big port on this route. For its advantage of capacity to accommodate all super-big

container vessels, destroyers, aircraft carriers and tankers larger than 500.000DWT,

VanPhong will be a dangerous rival for Singapore, Malaysian, Hong Kong Ports

(VietnamNet, 2008).

 

Regarding locational and geographical positioning, Vietnamese ports with

50% of the total goods worldwide are transported on the Vietnamese waters are really

in advantageous locations to compete with the ports in Far East region in term of

container transhipment. In addition, if the project of Kra canal of Thailand is

implemented, this will give Vietnamese ports great opportunities to become

transhipment centres of the region

 

THE KRA CANAL: IMPACT ON INTERNATIONAL RELATIONS

IN SOUTHEAST ASIA  paper given at BIMP-EAGA Conference 2012 by Rini Suryati Sulong  Lecturer – International Business Program School of Business and Economics, Universiti Malaysia Sabah

Another perceived benefit of the development of the Kra Canal is the projected spillover of trade

benefits to neighboring countries, particularly Myanmar, Cambodia and Vietnam. The increased

international trade activities brought about by maritime shipping and other businesses and services

around the canal can support the development of the Southern Economic Corridor (SEC). The SEC,

which geographically covers Cambodia, Vietnam and Thailand, will transform the coastal regions of

these countries through increased commercial, industrial, and tourism activities of the eastern

seaboard in Thailand (Sisovanna, 2012).

If the canal were to be built, Myanmar and Vietnam would also find itself benefiting directly from

development projects. Coastal cities in Myanmar and Thailand in mainland Southeast Asia currently

offer strategic water passages to the Strait of Malacca; and in the future, it would be twice as

important with the creation of the Kra Canal. The creation of the Kra canal would thus support the

development of a deep-sea port linked to an industrial estate in Dawei, previously called Tavoy, in

southern Myanmar (New Burma port…, 2011). For Vietnam, increased shipping entering and exiting

the Kra Canal would pass their southern coast, thus creating a great incentive for the country to

develop its southern port with the potential of rivaling Singapore. Thus, the development of the Kra

Canal has the possibility of projecting a strong economic growth of mainland Southeast Asia.

 

India, Japan and China - all net importers of energy - would benefit from having trade traverse the Kra Isthmus as well. For India, a Thai canal is a direct assist to its "Look-East" Policy, which promotes greater engagement with Southeast Asia. Given the current state of Indo-Vietnamese relations, the canal would also improve India's access to a major strategic partner on the South China Sea littoral. (Ankit Panda, The Diplomat 01.12.2013)

 

Common objections to the Kra Canal + answers

Digging the Kra Canal will divide the country and will represent a security risk.

 

The two sides of the Kra Canal will be connected by a series of bridges/tunnels with highways, rail connections, power and communication lines. This new infrastructure will provide much more connectivity for the Isthmus of Kra than exists today. Construction and operation of the Kra Canal + ports at the two ends + industrial zones will provide jobs to masses of people on both sides of the canal, greatly improving living standards and bringing the country together. It will thereby also greatly contribute to security and social development.

Digging the Kra Canal is not worth it as nobody will want to use it.

The quotes above document the great interest of countries in the region in using the Kra Canal. Right now over $1 trillion of goods are shipped via the Straits of Malacca, if even a fraction of that goes through the Kra Canal, it will pay for itself.

Nobody knows where to dispose of the dug-up soil.

 

Dug-up soil from construction of the Kra Canal can be used to create artificial islands at both ends which can be used for harbor facilities, airports, industrial zones and residential areas. There are examples of artificial islands in countries all over the world, which have been created out of soil, sand and rocks from digging and dredging operations. A good example is the beautiful Palm Island in Dubai.

 

Alternatively there are proposals for an elevated construction of the Kra Canal which would not produce excess soil.    

The Kra Canal will represent a threat to the environment.

With this argument the Panama Canal, the Suez Canal, the Rhein-Main-Danube Canal, the canals of Venice or even the Grand Canal of China could never have been built. Also there would be no cities in the world and almost no agriculture. Without infrastructure development it is impossible to support a world population of over 7 billion people in a sustained basis. How many people do the radical environmentalists propose to eliminate?

On the other hand there are many examples for how canals have become integrated into the natural environment, providing new possibilities for land and sea life. 

Overall the Kra Canal will reduce the environmental burden connected with maritime trade, by eliminating collisions which are a major source of oil spills and releases of chemicals in the Straits of Malacca and Singapore today. Environmental monitoring along the Kra Canal is much easier than along the Straits of Malacca.