Tuesday, September 9, 2014

Thai junta resurrects plan to build Andaman port

Tuesday, September 9, 2014 - 11:00
Tan Hui Yee
The Straits Times
It is quiet in Pak Bara. Fishermen returning from the Andaman Sea dock their vessels at its pier in the south-western corner of Thailand. Travellers hop onto boats that cut across turquoise waters towards nearby marine national parks.
All this could change if the kingdom carries out a long-stalled proposal to transform Pak Bara into a deep-sea port that would give shippers a shortcut between Europe and East Asia.

The plan calls for Pak Bara in Satun province to be eventually linked by road and rail to another deep-sea port in Songkhla province by the Gulf of Thailand, allowing international cargo to avoid the circuitous and congested route down the Strait of Malacca.

Proponents point out that ASEAN's second-largest economy is heavily reliant on Laem Chabang port in the gulf, which is fast reaching its capacity. The country has no equivalent outlet along the Andaman coast, so rubber, a key export in the Thai south, has to be trucked to Malaysia and then shipped out via Penang port.

Officials hope Pak Bara port will open up new trade lanes to the Middle East, Africa and Europe, and, when developed alongside new industries, will provide another engine for an economy weakened by a prolonged bout of political unrest.
Mr Thanin Pa-em, deputy secretary- general of state planning unit National Economic and Social Development Board, tells The Sunday Times: "If we don't have a gateway connection with the world on the Andaman side, it'd be to our disadvantage in the long term."
The Thai junta has approved the project. The Transport Ministry is doing a detailed assessment and expects work to start in late 2016 if there are no hitches.

According to Dr Chula Sukmanop, the head of the ministry's marine department, the two ports and a connecting rail link would cost about 50 billion baht (S$2 billion). It is not clear at this point how it will be funded, but the Ministry of Finance wants to start a fund to attract private sector investment in infrastructure projects.

The Pak Bara project is the latest of many attempts at a cross-coastal link in southern Thailand since the idea was mooted some 300 years ago.
A previous plan to cut a canal across the narrow strip of land ran up against mountainous terrain and prohibitive costs. A study by Japan's Global Infrastructure Fund in 1999 estimated a 50km canal would cost at least US$20 billion to build. Still, the allure of creating a Thai waterway with the stature of the Panama Canal kept the discussion alive.

Then in 2004, the Thaksin Shinawatra Cabinet approved its own alternative, the Strategic Energy Land Bridge Project, which called for a 250km pipeline cutting across southern Thailand to transport oil that would normally otherwise be shipped through the Malacca Strait. It failed to take off.
In 2007, after Thaksin was ousted in a military coup, the authorities floated plans for the Pak Bara port. It ran into protests from locals, who feared that their fishing grounds and tourism earnings would be destroyed when large vessels started crowding the vicinity of their treasured marine parks.

Neighbouring Myanmar offered a way out. In 2010, it granted a concession to Thailand's biggest builder, Italian-Thai Development, to develop a deep-sea port and industrial zone in Dawei, by the Andaman coast. The project would eventually have a road and rail link travelling eastwards to Bangkok and Laem Chabang port, giving Thailand its much sought-after large-scale Andaman port.
But the company floundered and was forced to give up its concession last year.

Now, attention has switched back to Pak Bara, with officials trying to drum up support.
They would have to convince sceptics who say it may be more difficult than thought to persuade shipping lines to use the 110km Satun-Songkhla land bridge. While they may save a 1,000km journey around Peninsular Malaysia, they will also be weighed down by extra costs and time incurred when cargo is moved from ship to land, and then back onto ship.

A 2010 study commissioned by the transport planning office found that while the land bridge will save transit and cargo handling time by 5 per cent to 8 per cent, it would raise costs by 3 per cent to 5 per cent.
Analysts say demand for the port can be sustained if it is built together with some industrial facilities, but getting locals to agree to that will be difficult.

"The demand for a port is derived demand," says Ms Sumalee Sukdanont, a port specialist at the Transportation Institute of Chulalongkorn University. "You have to build (an accompanying industrial zone) first to build a port, or build industry together with the port. If you build a port first, there will be no ships."

It does not help that the shallow waters around Pak Bara require the port to be built some 4km off the coast to serve large ships - so incoming vessels may encroach on the nearby Tarutao National Marine Park. Satun native and environmental activist Wichoksak Ronnarongpairee says: "What we stand to lose is enormous - our land, our sea, our occupation as fishermen and our way of living." Activists vow not to let the martial law, in place since May, deter them from opposing the project and are planning to speak out at various seminars in Bangkok in a week's time.
Mr Thanin hopes all parties would "meet in the middle". Until then, the time-worn dream of bridging the coasts of southern Thailand remains out of reach.

Quest to connect
1677: Siamese King Narai suggests excavating a canal across the Kra isthmus to facilitate trade.
1793: Prince Bovornmahasurasinghanart envisions using a similar canal to protect towns on the Andaman coast against Burmese attacks.
1946: The Anglo-Thai treaty forbids the Siamese government from building such a canal without prior agreement of the British government. The British deemed the canal a threat to the dominance of Singapore - then a British colony - as a regional shipping hub.
2001: Then Deputy Prime Minister Chavalit Yongchaiyudh revives the Kra Canal idea, saying it would help kick-start the economy.
2004: The Thaksin government approves instead the construction of a pipeline to transport oil across the isthmus.
2007: Thai government announces plans to build a deep-sea port in the southern province of Satun, by the Andaman Sea. Thailand does not have a high capacity deep sea port on its western coast.
2010: Locals in Satun oppose the port project. Thailand's construction giant Italian-Thai Development inks concession to develop Dawei, a deep-sea port in Myanmar that will have a road connecting to Thailand.
2013: Italian-Thai Development loses its concession after failing to attract foreign investors. The Thai and Myanmar governments take over through a special purpose vehicle in which both hold equal shares.
2014: Thailand's military junta gives in-principle approval for the Pak Bara port.