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Ambitious Thai Canal Proposal

A proposal to build a canal in Thailand could revolutionize shipping in and around Asia, linking the Indian and Pacific Oceans.

At its narrowest point, the Malay Peninsula in the country's south is just 50 kilometers wide.

Most of the land in the southern Thai province of Nakorn Si Thammarat is flat. People have been digging canals there for a long time, using the water to grow crops.

A 20-year-old waterway there is reportedly a model for the proposed canal.

Opas Ratanaburi is an academic behind the project, known as the Kra Canal. He submitted his plan to the government way back in 2005.

"What's important is that the canal would be a shorter route to deliver oil to 2 major economies: Japan and China," he says.

Goods being sent to East Asia are currently transported via container ship on the Indian Ocean through the Malacca Strait. The academic says building a new canal on the Malay Peninsula would slash 3 days from the journey.

He says it would also help ease congestion in the strait. But the cost -- about a third of Thailand's annual national budget -- has raised eyebrows.

The China-led Asian Infrastructure Investment Bank may help push the project forward. The bank is trying to stimulate infrastructure construction in Asia using its huge reserves of funds.

Opas says he has received several inquiries from Chinese firms and organizations.

"China is looking closely," he says. "China is highly likely to invest because the canal project will benefit the country."

The prospect of Chinese investment has fueled expectations that the canal will be built.

This Thai firm produces feed for fish farms. It has a plant on the east side of the peninsula. So it exports its products only to China and other East Asian countries.

Company officials say the new canal will allow them to ship products to India, Myanmar and elsewhere.

"The canal would cut our shipping costs and expand our exports," says fish-food maker Rujathit Sucharto. "We believe it would create a bright future."

But some neighboring countries, particularly Singapore, aren't enthusiastic about the idea.

Many tankers passing through the strait use Singaporean ports, mainly to transfer cargo. Shipping accounts for 7 percent of Singapore's GDP.

"There is concern on how it will impact Singapore's economy," says Graham Ong-Webb, Chief Operating Officer of Future Moves. "If the Kra canal is built, essentially the bulk of the maritime traffic that passes through the Malacca Strait will deviate or use the Kra canal.

"Business is going to shift towards Thailand in this case. Thailand will become the new maritime hub so to speak."

It's clear that Thailand would benefit greatly from the canal. Government officials seem to be carefully assessing these benefits as well as the cost and the risks, including opposition from the country's neighbors.


NHK/Karnbodi Ngamjit