Thailand’s Land Bridge Project: A Catalyst for Economic Growth

Thailand, with a vision to transition from an upper middle-income to a high-income nation by 2037, embarked on the Land Bridge project as a key strategy to boost economic growth. The project, which has already received cabinet approval, is a fundamental component of the country’s Southern Economic Corridor (SEC) development plan, aimed at seamlessly connecting the Gulf of Thailand with the Andaman Sea by 2039. This ambitious endeavor is set to enhance Thailand’s strategic geographic location, improve transportation and international trade, and, significantly, stimulate the economic growth of the Southern region. This article delves into an academic analysis of the Land Bridge project, its current stage, its potential benefits for investors, and the estimated total investment required.

Figure 1. The Land Bridge project is anticipated to significantly reduce transportation distances.

1.   Overview of the Land Bridge Project

The “Land Bridge” project represents a visionary proposal to bridge the geographical divide between the Gulf of Thailand and the Andaman Sea, effectively linking the Chumphon and Ranong provinces. As of October 16, 2023, the project has obtained the crucial approval of the Thai cabinet, marking a significant milestone in its development. The Land Bridge project, managed by the Office of Transport and Traffic Policy and Planning (OTP), is presently undergoing feasibility studies, environmental and health impact assessments (EHIA), and business model studies, with the investment value estimated at an astonishing 1 trillion baht.

Figure 2. An Overview of the Land Bridge Project.

2.   Current Stage of the Project

The Land Bridge project is progressing through a well-structured timeline, as outlined below:

✓   Conduct EHIA and Business Model Study
✓   Present project principles for cabinet approval in October 2023
✓   Conduct overseas Investor Roadshows in October-November 2023
✓   Enhance project details and analyze during November-December 2023

✓   Propose the SEC Act with benefit conditions to the council
✓   Prepare a Request for Proposal (RFP) to select private investors
✓   The council passes the SEC Act during the fourth quarter of 2024
✓   Open bidding for private sector involvement in 2025
✓   Sign contracts in 2025
✓   Commence construction in 2025, with a construction period of 5-8 years, divided into four phases

✓   Continue with the construction phase
✓   Expect the project to commence services in the first phase during the fourth quarter of 2030

Mr. Panya Chupanich, the director of OTP, highlights the effort to attract foreign investors through roadshows in several countries, aiming to entice major container shipping companies. Once the project details are refined and analyzed, they will be submitted for cabinet approval in January 2024. The project will be bid for in its entirety in 2025, encompassing deep sea ports on both sides, a 6-lane special highway between cities, and a double-track railway, all with a concession period of 50 years.

3.   The Land Bridge as an Opportunity for Investors

The primary function of the Land Bridge is to leverage the benefits of linking two major ports. It will facilitate the efficient transportation of goods, significantly reducing the travel distance for ships and enhancing trade between the East and West. For instance, oil from the Middle East can be offloaded in Ranong and transported to the Gulf of Thailand, eliminating the need for ships to journey far into the East. Similarly, ships from East Asian countries can access oil from the Gulf of Thailand via Chumphon, bypassing lengthy routes.

This assumption is supported by Saudi Arabia’s interest in investing in oil distribution centers within the Land Bridge project area in Southern Thailand. This was evident during a visit by the Federation of Thai Industries, the Deputy Prime Minister, and the Minister of Foreign Affairs to Saudi Arabia in June 2023. Their mission was to strengthen bilateral cooperation and promote trade and investment negotiations, positioning Thailand as a potential source for oil distribution in the region.

4.   Estimated Total Investment Value

The Office of Transport and Traffic Policy and Planning estimates the total budget for the Land Bridge project to be approximately 1 trillion baht. This substantial investment can be broken down as follows:

✓   Sea Port Construction (2 sides) supporting 20 million TEUs for each side: 636 billion baht
✓   Area Development for Goods Transportation: 141 billion baht
✓   Linking Routes Construction (special motorways and double-track railway): 223 billion baht

In conclusion, the Land Bridge project holds immense promise as a driver of economic growth for Thailand. Its strategic importance in streamlining transportation and trade has garnered significant government support, and the interest of foreign investors is a testament to its potential. While the estimated investment cost is substantial, the long-term benefits in terms of increased GDP, job creation, and enhanced quality of life make this project a key pillar of Thailand’s journey towards high-income status by 2037.

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