Thai Prime Minister Srettha Thavisin has pitched for the development of a land bridge connecting Ranong province on the Andaman Sea with Chumphon province on the Gulf of Thailand. Speaking at the China-Thailand Business Forum on the sidelines of the 3rd Belt Road Initiative hosted by China in Beijing, Srettha made the argument that “the Panama or the Suez Canal… can shave off thousands of miles of voyage. However, the proposed Thai Canal (Kra Canal) could only shave off hundreds of miles,” The project, according to Thai Prime Minister, would involve building two deep sea ports, one each in Andaman Sea and Gulf of Thailand, and would be linked through a rail and road system. The project is estimated to cost US$35.6 billion and developed in two phases- first phase is expected to finish in 2030, and full completion by 2039.

The project is as old as nearly 300 years and comes up time to time in strategic debates and discussions. It has featured in discussions relating to the Chinese Belt and Road Initiative (BRI) and it is for this reason that Prime Minister Srettha Thavisin chose to raise the issue while in China, and catch the ears of the Chinese BRI officials.

Unlike the earlier plan to dig a 26-metre-deep and about 100 kilometers long artificial water link, Thai Prime Minister envisions multimodal transport that would allow vessels discharge cargo at the two mega ports (Ranong province and Chumphon province). Conscious of the environmental costs, but the new plan which envisages discharging/loading cargo at the two mega ports adds to transportation costs unlike through traffic moving through the Straits of Malacca or transshipment at Port Kelang and Singapore.

In 2007, China had shown interest in the project that involved digging the canal and at that time, the project was estimated to take nearly 10 years, cost nearly US $25 billion, and involve nearly 30,000 workers. Another pre-feasibility study of the project estimated that it could cost about US $20 billion to build a two-lane canal, which would allow transit by vessels of up to 500,000 DWT at a speed of 7 knots.

In 2014, LiuGong Machinery Co. Ltd and XCMG, state-owned companies in partnership with the privately owned Sany Heavy Industry Co Ltd began to study the project, which involved special economic zone alongside the canal that can potentially generate nearly three million jobs and attract more foreign direct investment to the region.

The Kra project has several advantages for Thailand and Bay of Bengal littorals i.e. Bangladesh, India, Myanmar and Sri Lanka. The Bay of Bengal primarily features Short Sea Shipping involving liquid bulk (crude oil and petroleum products) and dry bulk (coal, iron ore, grains, bauxite, fertilizer). The container trade (merchandised goods) is quite low due to lack of infrastructure as also the manufacturing capacity of the countries around the Bay of Bengal. It is worth mentioning that the Bangladesh, Bhutan, India and Nepal (BBIN) sub regional network too can benefit from the short sea shipping operating in the Bay region.

In particular the Andaman and Nicobar Island group could engage in international trade with many of the non-Bay of Bengal ASEAN countries as far as northeast Asia. The Indian government has promoted investments in maritime connectivity between Port Blair and other ports in the Andaman Sea such as Aceh, Indonesia, Ranong port in Thailand and Mongla Port in Bangladesh.

For the Nicobar Island chain, the Indian government has allocated INR 10,000 crore to build a container transshipment hub and Expressions of Interest for the “container transshipment terminal with the Free Trade Warehousing Zone in South Bay, Great Nicobar Island to provide Indian shippers an alternative to Colombo, Singapore and Port Klang (Malaysia) transshipment ports” has been put out.

However, like any maritime infrastructure particularly those being built under the BRI, the Kra project attracts strategic challenges particularly for India which apprehends permanent Chinese naval presence in the Bay of Bengal jeopardizing its security. Till very recently, the Nicobar Chain of islands had remained insulated from commercial economic activity, and the priority was on building strategic infrastructure given its close proximity to the western end of the Straits of Malacca through which commercial and naval traffic particular Chinese naval tasks forces enter/leave the Indian Ocean.

Chinese warships are a common sight in the in the Arabian Sea- Gulf of Aden and experts argue that it is not unthinkable that Andaman Sea could be the new destination for the PLA Navy (PLAN) given China’s close naval cooperation with Bangladesh, Myanmar and now Thailand which is planning to acquire a submarine. In this context, in 2019, Shiyan-1, or Experiment 1, a Chinese Academy of Sciences survey vessel was detected while it was engaged in research activities near Port Blair.

Finally, the Kra project is a mixed bag of economic opportunities as well as strategic challenges for India. The latter is being addressed through INS Baaz on the Great Nicobar Island (GNI) that supports military aircraft, and Kamorta Island and Campbell Bay facilities are primed to support naval fleet.

Dr Vijay Sakhuja is Associated with Kalinga International Foundation, New Delhi.