Thailand’s Perennial Kra Canal Project: Pros, Cons and Potential Game Changers

Abstract

Few mega construction projects have been on the drawing board for as long as Thailand’s Kra canal. The idea of cutting a waterway across the Isthmus of Kra in the Upper South of the country that would link the Gulf of Thailand with the Andaman Sea—and hence the Pacific and Indian Oceans—was first proposed more than 300 years ago. Since then the project has been repeatedly revived, resulting in a series of expensive engineering surveys and feasibility studies, before being quietly dropped. The arguments for and against a Kra canal are longstanding and well-rehearsed. Proponents of the canal point to the economic and strategic benefits that Thailand would accrue. They argue that the construction of the 100-kilometre canal, and related industrial infrastructure such as ports, manufacturing plants and oil refineries, would create jobs for tens of thousands of Thai workers, stimulate the economy (especially during periods of economic downturn) and, over the long-term, generate a lucrative revenue stream from the collection of shipping tolls. Militarily, the canal would enable the Thai navy to move ships quickly from one coast to the other during times of crisis. In addition, a Kra canal would also provide a faster and thus cheaper route between the Indian Ocean and the South China Sea, thus providing a viable alternative to the increasingly congested and “pirate infested” Straits of Malacca. Detractors of the canal remain unconvinced. Their main argument is that a Kra canal is commercially unviable: that the massive construction costs could not be clawed back from toll fees as shipping companies would be reluctant to bear additional costs just to save two or three days sailing time (especially at a time when the price of oil is low)—a situation quite unlike the Suez and Panama Canals which save vessels weeks of extra time at sea. With regard to the strategic benefits, critics argue that Thailand faces no threats from its neighbours, a canal would cleave the country into two halves and thus embolden separatists in the Far South, and the ownership and operation of the waterway would inevitably become entangled in Great Power rivalry.