(July 24): Thailand plans to scrap its proposed land-bridge megaproject that would link the Gulf of Thailand and the Andaman Sea after a government study found it is no longer economically viable and poses significant environmental risks.

A government committee recommended the terminating the project, earlier estimated at a cost of about one trillion baht (US$29.7 billion or RM121.4 billion), Finance Minister Ekniti Nitithanprapas said in a news briefing on Friday. The updated study found it would lose money overall, compared with an earlier assessment that projected substantial economic gains, he said.

The 100km connection, which could cut shipping times between the Indian and Pacific oceans by bypassing the Malacca Strait, returned to the spotlight this year as tensions around the Strait of Hormuz underscored the vulnerability of global shipping routes. In April, Deputy Prime Minister Phiphat Ratchakitprakarn said the government would accelerate the project.

The study also showed the project’s expected financial return had fallen to 4.8% from 8%, while cargo volumes were projected to be as much as 16% lower than previously estimated. Nine of the world’s 10 largest shipping lines have already invested in competing projects, leaving limited interest in the land-bridge proposal, the official said.

The pitch for the land-bridge project included seaports to be built on either side of the country’s southern peninsula and which would be linked by highway and rail networks. The idea replaced a decades-old Thai proposal to dredge a canal through the Kra Isthmus.

Separately, the latest study warned the project could damage environmentally sensitive areas, including Ranong’s biosphere reserve and wetlands, and threaten key marine tourism sites.

Instead of pursuing the land bridge, the government plans to upgrade the Ranong Port and develop a rail link that would connect the Andaman coast with Thailand’s existing rail network to improve freight transport, Ekniti said.

The recommendation will be submitted to Thai Prime Minister Anutin Charnvirakul and the Cabinet for approval. Ekniti said the government had incurred no losses from the earlier plan because no land had been acquired and construction had not started. 

“The project offers an important lesson that large infrastructure investments should begin with a clear assessment of the country’s strategic priorities and environmental considerations before agencies proceed with detailed project studies,” Ekniti said.

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