KRA CANAL IN THAILAND (Impact on viability of Singapore ports)

Mr Sin Boon Ann asked the Minister for Communications and Information Technology whether the development and operation of the Kra Canal in Thailand is likely to have a substantial impact on the viability of ports in Singapore.

The Minister for Communications and Information Technology (Mr Yeo Cheow Tong): Sir, the idea to build a canal across Southern Thailand linking the Andaman Sea with the Gulf of Thailand was apparently first conceived in Thailand as far back as the 18th century. Since then, the proposal has been reviewed from time to time. One main issue surrounding the project is its high cost, recently estimated at 810 billion baht or about S$35 billion. There are also concerns about the impact of such a project on the environment.

While there has been renewed discussion on the Kra Canal project recently, the Thai government has yet to come to any decision. According to a report in the Business Times on 28th August, Thai Prime Minister Chuan Leekpai told reporters that, and I quote:

"There is no plan to build the canal for now. It is still being studied and it is not a simple issue." However, if the project were to finally proceed and a shipping route across Southern Thailand established, the Canal would undoubtedly divert some shipping away from the Malacca Straits and Singapore Straits. These would be mainly ships which transit the Straits without intending to call at our port. However, as Singapore is a major shipping hub, the majority of vessels at our port come here to discharge and load cargo, undergo repairs and take bunkers, ship stores, water and other materials. Hence, the challenge for PSA depends not on whether there is a Kra Canal, but on whether we remain competitive as a shipping hub which ships choose to come to because it makes good economic and business sense.

Even without the Kra Canal, PSA faces intense regional and international competition. Therefore, we never take our hub port status for granted. Our port must always be prepared to face new challenges and be proactive in maintaining its competitiveness. This is why PSA continually strives to ensure that it delivers the highest level of service at competitive rates, and that it has excellent connections to ports in the region and worldwide. In addition, the Maritime and Port Authority of Singapore is also working with relevant agencies such as the Trade Development Board to see how we can further develop Singapore as an international maritime centre.