7-11-2023 (SINGAPORE) Acting Transport Minister Chee Hong Tat has stated that the proposed land bridge project in southern Thailand may not offer cost savings for shippers compared to sailing through the Malacca and Singapore straits. While the project could potentially reduce travelling time for some vessels, Mr. Chee emphasized that shipping firms need to consider the overall costs versus the benefits.
The Thai government plans to construct a 90km road and rail system connecting two new deep-sea ports on the country’s eastern and western coasts, bypassing the Strait of Malacca, a crucial shipping route where a quarter of the world’s traded goods passes through. Thai Prime Minister Srettha Thavisin has suggested a potential reduction in shipping time of six to nine days with the proposed project.
Mr. Chee highlighted that the time savings would depend on various factors, such as cargo unloading time, transportation across the land bridge, and loading onto ships at the other end. He urged shipping firms to carefully evaluate the costs and benefits before making decisions.
For the Port of Singapore, one of the busiest in the world, Mr. Chee emphasized the importance of remaining competitive and relevant. He acknowledged that other countries may enhance their port facilities and infrastructure, as well as develop new capabilities. Therefore, Singapore must focus on preserving its key advantages, such as connectivity and the “network effect.”
The land bridge project gained momentum when Thai Prime Minister Srettha Thavisin endorsed it and invited Chinese investors to fund the initiative during Beijing’s Belt and Road Forum in October. The estimated cost of the project is at least 1 trillion baht (S$38 billion), with construction expected to commence in 2025 and the first phase to be completed by 2030.
Regarding Singapore’s status as a global seaport, Mr. Chee stressed the importance of protecting the Republic’s connectivity and network effect. He explained that the value of a particular hub increases as more vessels call at it. Singapore is heavily investing in technological advancements to enhance port productivity. The development of Tuas Port, which officially opened in 2022, will enable the Republic to accommodate the largest container ships, providing shipping firms with the capacity and connectivity to meet future needs. Once completed in the 2040s, Tuas Port will be the world’s largest fully automated port, capable of handling 65 million twenty-foot equivalent units (TEUs).
Singapore’s ports recorded a container throughput of 37.3 million TEUs in 2022, the second-highest on record for the country, highlighting its significance as a major global seaport.
