The government has vowed to go ahead with the 1-trillion-baht Land Bridge megaproject after the House of Representatives endorsed a feasibility study on the project last week.
The study was conducted by a special House committee.
The scheme is high on the Pheu Thai-led government’s agenda. It is among the major investment schemes the government is trying to promote among potential foreign investors.
Those who support the Land Bridge project said it would help improve the economy, but those against the project are concerned about its environmental impact and financial costs.
Some people want the government to conduct a well-rounded survey on the project to lessen the environmental and livelihood impacts.
Prime Minister Srettha Thavisin has said previously the government is trying to create a climate fitting for foreign investment as it plans roadshows overseas to draw more attention from foreign investors.
The Land Bridge is the country’s largest investment project in 20 years after the construction of Suvarnabhumi airport, he said.
The 1-trillion-baht megaproject aims to develop a logistics network connecting Ranong along the Andaman Sea to Chumphon along the Gulf of Thailand.
The project comprises deep-water ports in both provinces, a motorway cutting across the land to connect the two provinces and a railway system.
Touted benefits
The study suggested investment for the project should be carried out under a public private partnership (PPP) model, allowing the private sector to invest in the construction and management of the project for 50 years.
According to the study, Thailand’s geographical position makes the country an ideal site for the project as the country serves as a gateway for transport and trade in the region as well as links with other continents.
The Land Bridge project will become a new logistics and transport hub as well as a new route for shipping, serving as an alternative to the existing route for the shipment of goods from the Indian Ocean to the Pacific Ocean through the Strait of Malacca.
It will help cut travel time from nine days through the Strait of Malacca to five days, reducing costs, according to the study.
The project’s net present value (NPV) is estimated at more than 257 billion baht and the project’s payback period is 24 years, according to the study. The payback period is the length of time an investor needs to recover an investment or reach a breakeven point.
The project is expected to create 130,000 jobs in Ranong, 150,000 jobs in Chumphon and to increase GDP from an earlier estimate of 4% per year by the National Economic and Social Development Council, to 5.5%, according to the study.
It forms part of the development of the Southern Economic Corridor, which comprises parts of Chumphon, Ranong, Surat Thani and Nakhon Si Thammarat provinces, the study said.
The study also suggested that since the Land Bridge is such a massive investment project, a special law is need for its implementation, as in the case of the Eastern Economic Corridor (EEC) project, while an environmental impact assessment is also required.
The study noted the private sector still expresses concern about the impact of the project on communities as a result of land expropriation.
The private sector suggested the government should offer appropriate compensation to ease the plight of people affected by the project and also upskill local labourers to prepare for the Southern Economic Corridor and the Land Bridge project, as well as plans to protect the environment and natural resources.
“It is necessary for the government to provide locals with clear information and allow them a say in the project,” the study suggested.
Transport Minister Suriya Juangruangreangkit said the Land Bridge project is part of the Southern Economic Corridor which will boost logistics, connectivity and trade with member countries of the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation — Bangladesh, Bhutan, India, Myanmar, Nepal, Sri Lanka and Thailand.
“Several countries are keeping an eye on how Thailand will carry out the Land Bridge project while some countries have expressd interest in investing,” he said.
“The project will benefit from Thailand’s geopolitical advantage as the country is located between the Indian Ocean and the Pacific Ocean, with sea routes on both sides. Apart from benefits in terms of transport, investments in related industries will take place in local areas,” Mr Suriya said.
MFP’s objections
However, Deputy Move Forward Party leader and list MP Sirikanya Tansakun has raised objections to the project.
She was among four MFP MPs who quit the House committee studying the megaproject. They said they do not want to rubber-stamp a project they disagree with.
She said she quit because it accepted the content of a report prepared by the Office of Transport and Traffic Policy and Planning (OTP) without thorough scrutiny.
Ms Sirikanya said they had repeatedly asked the OTP to clarify the project’s cost-effectiveness, the type of ships that would use the services provided by the project, and the volume of goods expected to go through ports.
However, the OTP did not give a reply, she said, adding the study by the House committee was based on the OTP’s report. She insisted the MFP agrees with the government’s southern economic development plan, but officials must quell all doubts before concluding whether investing in the project is worth it or not.
“I am not attempting to obstruct development in the South. But I am ready to support the project if the report from the OTP and the House committee’s study is revised or a new study is conducted to ensure cost-effectiveness,” she said.
Thirarat Samretwanich, a Pheu Thai MP for Bangkok and spokeswoman for the special House committee studying the project, said the study has been sent back to the cabinet after the House of Representatives endorsed it.
The cabinet will now act on the recommendations provided in the study and find ways to address any concerns raised before resubmitting it to parliament, she said.
Responding to criticism on the project’s cost-effectiveness, Ms Thirarat said the Land Bridge project requires an investment of about 1 trillion baht, and it will come entirely from the private sector. She said it is up to potential investors to consider whether the project is worth investing in.
“If they find that using the shipping route will save their costs, they will decide to invest. They can decide on the cost-effectiveness themselves,” she said, adding that bidding for the project is expected next year.
Weighing impacts
Assoc Prof Somjai Phagaphasvivat, an independent political and economic analyst, told the Bangkok Post the Pheu Thai-led government is determined to push for the project alongside the ruling party’s digital wallet scheme.
However, he said the Land Bridge megaproject requires a substantial sum of money, will take a long time to materialise and it must be undertaken in phases.
“The project may take at least 10 years before it can materialise as it involves attracting investors, analysing the budget, infrastructure and utilities,” he said. “The project will also connect with the Greater Mekong Subregion, Europe, and China’s Belt and Road Initiative,” Assoc Prof Somjai said.
However, the project’s potential impact on fiscal stability, society and the environment must be weighed before implementation, he said. He said the government must also convince investors that the project will help cut shipping time and costs. How the government handles the land expropriation issue and rivalry with Singapore’s port will also come into play.
“This project is tough because it requires a huge sum of money. But the public debt-to-GDP ratio is about 61% now and investment expenditure accounts for only 20% of the annual expenditure budget.
Economic growth remains sluggish while the country’s competitiveness is low,” he said.
“It depends on the government’s ability to convince investors,” he said, adding the Land Bridge project could become a potential geopolitical flashpoint as competing powers vie for influence in the region.
Jiraroth Sukolrat, deputy director of the OTP, said work on the required environmental impact assessment (EIA), construction design and business development model are expected to be completed in September. They will then be presented for cabinet approval in July or August of next year.
Bidding will be open by the middle of 2025 and the first phase of construction will begin in September of 2025 and could be complete in September 2030, he said, adding that as investment will come entirely from the private sector, the government will only deal with land expropriation.