Kra Canal News

A report in the Straits Times Vietnam is set to build a US$2.5 billion seaport in Ca Mau, its southernmost province, hoping to steal some spotlight away from the more popular regional hubs Singapore and Malaysia and could be a clue to Kra Canal. Vietnam announced that it would build a US$2.5 billion deep-water seaport, named Hon Khoai Port, on an island 17km off the coast of Ca Mau, Vietnam's southern-most province. The project was approved by Vietnamese Prime Minister Nguyen Tan Dung. The decision to build the portdoes not really make complete economic sense - until it is superimposed on the potentially heady commercial traffic the Kra Canal stands to provide.

The revival of the idea of building the Kra Canal through Thailand to enable shipping to bypass the narrow Straits of Malacca has been in the news recently. The plan would be to build a 750 mile (1,200Km) canal at an estimated cost of $28 billion, which would provide greater support to current supply chain. The notion of creating a new sea lane that slashes shipping times between the Andaman Sea in the Indian Ocean and South China Sea in the Pacific Ocean has never lost its powerful magnetism. According to a report in AsiaOne, the latest chapter in the Kra Canal epic came last month when Chavalit Yongchaiyudh, a proponent of the ambitious scheme when he was prime minister in the late 1990s, reportedly signed a Thai-Chinese deal to develop this project. However, Chavalit denied it.

China has denied it is involved in work on the Kra canal, defusing hype over a project that purportedly lets ships bypass the Strait of Malacca and Singapore's port, reports Strait Times. There are no plans by the Chinese government to participate, Foreign Ministry spokesman Hong Lei told a regular press briefing. Earlier,  Chinese embassy in Thailand, which said that China has not taken part in any study or co-operation on the matter. This comes after Chinese media recently reported that China and Thailand had signed a memorandum of understanding (MOU) in Guangzhou to build a US$28 billion (S$37 billion) canal that cuts through the narrow Isthmus of Kra in southern Thailand.

Thailand and China have signed a memorandum of understanding (MOU) in Guangzhou to jointly cut a shipping passage across Kra Isthmus in southern Thailand, the narrowest part of the Malay Peninsula. The canal, located at Kra Isthmus, will enable ships to bypass the Malacca Strait so as to shorten their voyage by 1,200 km. The canal will be 102 km long, 400 meters wide and 25 meters deep. Unlike the Suez Canal the Kra Canal does not exist yet. For centuries, the Thais have been mulling about the possibility of building a deep-water canal cutting through Thailand’s long peninsula to link the Indian Ocean with the South China Sea. Observers say that Kra Canal could be a reality in 10 years at the cost of US$210 billion.

Thailand is expected to begin construction soon of a $21.2 billion canal from the Indian Ocean to the Gulf of Thailand which would allow ships to bypass Malaysia and Singapore, Reuters reported. Thai Science Minister Arthit Urairath was quoted as saying the Kra Canal could start in the next three years. It quoted other officials, academics and bankers as saying the project could be approved as early as this year. Plans for a canal across the narrow strip of southern Thailand north of peninsula Malaysia have been under consideration for many decades but the idea has always been shelved on grounds of cost or risk to the environment.But Arthit said there was no longer any real objection to the project which he said would benefit the whole country.

Thailand is expected to begin construction soon of the Kra Canal from the Indian Ocean to the Gulf of Thailand which would allow ships to bypass Malaysia and Singapore. While the long discussed project has in the past been tripped up by environmental concerns, it appears there are no remaining objections and support in the Thailand government is strong for the project. It is estimated that the project could be completed in six years.

Thai Prime Minister Chuan Leekpai has denied reports the government plans to build a canal across southern Thailand, bypassing the busy Malacca Straits shipping lane, as reported in last week's Maritime Week. He said that while the idea is still being studied, the construction of a canal is not a simple issue and no decision has been made. If the study found it feasible to construct the canal, the country might build it, he said. It is estimated that the project would cost about $21.2 billion and take six years to complete. Proponents of the canal claim it would bring huge economic benefits and could threaten Singapore's position as the region's leading port.