The completion of Highway 12 — a 793-km transport corridor linking Tak in the North with Mukdahan in the Northeast — will provide immense business opportunities as the emerging economic driver in the region, according to local transport and tourism industry leaders.
Businesses are upbeat and more confident of growth after the government recently announced the completion of the final phase of Highway 12, a 115.6-km section between Kalasin and Mukdahan in the Northeast, according to government spokesman Anucha Burapachaisri.
Prime Minister Prayut Chan-o-cha expects the road upgrade to not only ease the transport of goods and people but also bring economic benefits to residents of Kalasin and Mukdahan, said Mr Anucha.
As the road also forms a part of the East-West Economic Corridor (EWEC), the transport and tourism sectors foresee a boom in logistics, as well as trade and tourism in the region.
Trade and transport route
Chanin Songmek, president of Tak’s chamber of commerce, said Highway 12 holds immense significance as part of the EWEC, a route which links four mainland Southeast Asian countries, from Myanmar in the West to Vietnam in the East.
“It will boost cross-border cargo transport from Tak to Mukdahan and Laos and Vietnam and ease the shipping of goods along the north-south route through Myanmar,” he said.
Highway 12 begins at the Second Thai-Myanmar Friendship Bridge in Tak’s Mae Sot district and ends at Mukdahan’s Khamcha-i district, where it connects to Laos at the province’s Thai-Lao Friendship Bridge. It links the two border provinces via Sukhothai, Phitsanulok, Phetchabun, Chaiyaphum, Khon Kaen and Kalasin.
Mr Chanin predicts quicker transport time and lower freight damage due to fewer road accidents after the section of Highway 12 from Tak’s Muang district to the border was upgraded from two lanes to four lanes.
The value of cross-border trade in Tak rose to 140-billion-baht last year, he said.
“A special economic zone (SEZ) in Mae Sot is under development. The complete Highway 12 will boost its potential and make the SEZ even more attractive as an investment destination,” he said.
Now that a number of special economic development zones have opened in Mae Sot, the Treasury Department and the Industrial Estate Authority of Thailand are inviting companies to invest in the border economic area, which is also a duty-free zone, he said.
The highway will also strengthen efforts to attract entrepreneurial investment. Since the highway was completed the value of exports has increased markedly, he said.
Mr Chanin said Thailand is already a gateway to the region and the road network is the foundation of development. Highway 12 will offer business opportunities for hoteliers, food shops and fuel stations.
“It will inject vitality into the economy along the entire route, not to mention huge increases in revenue from import-export tariffs,” he said.
Mr Chanin said the complete highway is expected to boost regional tourism and especially tourism in Tak’s five border districts following an overhaul of immigration services.
Mr Chanin also expects the highway will encourage mobility in the region and see more talent gravitate towards Thailand’s industrial sector.
A report from the Office of the National Economic and Social Development Council said the highway will also benefit the SEZ in Mukdahan. There are 868 new businesses in the province’s SEZ with a value of 1.6 billion baht.
The Finance Ministry said the East-West Economic Corridor will boost transborder trade by at least 50%.
Road-boosted economy
In the tourism sector, not only will Highway 12 promote tourism in Thailand and neighbouring countries, but it will also be an opportunity to generate income for the provinces that the road passes through.
Chamnan Srisawat, president of the Tourism Council of Thailand (TCT), said Highway 12 will promote the convenience of travelling between provinces and boost the domestic tourism industry in the process.
“Like the Malaysian Expressway that connects Thailand’s Sadao border to Singapore or the expressway that links northern and southern Vietnam, cities through which these roads pass receive great economic benefits. Highway 12 will result in the same thing,” Mr Chamnan said.
“Thailand should not be the only passageway. We should build rest areas that have full facilities like toilets and restaurants every 50-100 kilometres along the highway to take tourists and create marketplaces for local people.
“Meanwhile, the government should create tourism campaigns or build landmarks to invite tourists to travel,” he said.
Chaiyapruek Thongkham, chairman of the domestic tourism association, said the upgrade of Kalasin-Mukdahan section has improved mobility and reduced logistic costs.
“It took two days to move goods from Mae Sot to Mukdahan. The road upgrade cuts transport time by half,” he said.
However, he said the route is mainly used for logistics and freight and does not attract visitors. Tourists opt for other routes that take them to Chiang Rai, Nong Khai or Udon Thani where they can visit Laos.
“The government should make road travel more convenient. Or even better, it should consider building a rail system linking with Laos,” he said.
Regional connectivity
According to Sarawut Songsiwilai, director-general of the Department of Highways, Highway 12 is part of a cooperation initiated several decades ago to connect Asean countries.
“Each country reviewed their existing transport networks to determine where they could create the link. It could be north-south or east-west directions. When we looked at our own, we saw Highway 12,” he said.
Highway 12, the main route for transport from Tak’s Mae Sot district to Mukdahan, originally had two lanes. On Jan 10, 1995, the cabinet agreed to upgrade the entire route to four lanes, and six lanes in some sections.
It was not until late 2007 that the route was officially called Highway 12, he said.
However, Mr Sarawut said the upgrade of a section of Highway 12, which is 81km long in Nam Nao national park in Phetchabun, is still under review. The department is still studying an alternative route as recommended by the National Environment Board, he said.
According to Mr Sarawut, the road upgrade cost about 28 billion baht and is expected to generate an Economic Internal Rate of Return (EIRR) of no less than 12% — as fixed by the Office of the National Economics and Social Development Council.