Thailand is in a strong position to cement its role as central ASEAN’s leading transport logistics hub, with massive infrastructure spending earmarked for the next eight years.
However, political uncertainty surrounding the new coalition government could delay projects and investment, according to one local expert.
At the centre of the country’s infrastructure expenditure is the US$50 billion Eastern Economic Corridor (EEC). The ambitious project spans 13,285sq km across the eastern provinces of Chonburi, Rayong, and Chachoengsao; and includes plans to turn each into high-tech manufacturing hubs complete with seamless land, sea and air transport connections.
Part of the EEC mega-project is the US$9.4 billion upgrading of U-Tapao International Airport in Rayong province. Officials say the project – which includes a second runway, third passenger terminal and new air cargo facilities – will extend passenger capacity from 800,000 to 3 million and help turn Thailand into ASEAN’s leading aviation hub.
The second pillar of the EEC is high-speed rail. For example, the “High-Speed Rail Linked 3 Airport Project” will connect U-Tapao with Bangkok’s two major airports, Suvarnabhumi and Don Mueang, with 220km of new and upgraded rail routes between the three airports.
Situated between Bangkok and U-Tapao is Laem Chabang port, Thailand’s major maritime gateway. The port is crucial to EEC transport connectivity, and with its Phase III development, the local port authority plans to introduce intermodal rail transfer operations to reduce container truck miles and alleviate traffic congestion.
New deep-sea terminals will be added, too, with total port capacity expected to reach 18 million TEU per year – it is currently 7.7 million TEU. Last year, terminal operator Hutchison Ports opened its US$600 million Terminal D, with the capability to service 14,000-TEU ships for the first time.
With high-tech manufacturing at the heart of the EEC, there’s also a strong focus on the digital economy and e-commerce. Last year, Alibaba announced plans to build its own logistics hub in Chachoengsao province, serving as a regional cross-border distribution centre.
Not all stakeholders are convinced the EEC will go ahead as planned, however.
According to Dr Ruth Banomyong, head of the Department of International Business, Logistics and Transport, at Thammasat University, the project faces some significant challenges.
“The EEC has become a potential alternative or safe haven for external investors, but there are now protests by the local population as they are against the zoning classifications of land in the EEC,” he explained.
Despite opposition from various community and political groups it looks like the major projects will go ahead.
“The megaprojects are still in place, however, and the budget has already been allocated since the previous government. The main focus is still on rail infrastructure, especially the medium-speed railway with China.”
Indeed, work on the Thailand-Laos link in the Bangkok-Vientiane-Kunming railway is due to begin soon, and is expected to be operational by 2021.
Another key transport project, separate from the EEC, is the proposed 62km Hat Yai-Sadao Motorway in Southern Thailand. The US$1.8 billion project will enhance trade connectivity with the Malaysian border and industrial parks in southern Songkhla province.