Monday, May 25, 2015

KRA ISTHMUS CANAL, THAILAND, SINGAPORE

There could be significant supply chain benefits too.


Will China and Thailand’s Kra Isthmus canal agreement sink Singapore?

By Alex Lennane
Norman Einstein/Jude Chan
Norman Einstein/Jude Chan
Another new canal project appears to be on the cards. At a cost of $28bn, the Kra Isthmus canal, which would cut through the Malay Peninsula in southern Thailand, could pose a grave threat to Singapore’s maritime industry. China and Thailand have reportedly signed an MoU over the 100-km long canal project, which would not only prevent ships from having to sail the pirate-infested waters of the Straits of Malacca, but would also cut 1,200km, or up to five days off routes – saving ships some $350,000 in fuel costs. Up to 40% of the world’s trade currently passes through the Straits of Malacca. Oddly, however, both China and Thailand have denied signing an agreement.