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

05.22.2015 · Posted in Land, Loadstar leads, Sea, Supply chain Add to favorites

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.