The proposed Land Bridge project in southern Thailand is viewed by the current administration as a marker of its success in drawing foreign investment, similar to how previous governments regarded the Eastern Economic Corridor (EEC).
While some officials discuss the two projects in the same manner, the EEC is operational and continues to be developed, while the Land Bridge is still a proposal.
The Srettha Thavisin government needs to balance supporting the EEC as it promotes investment in the Land Bridge proposal, as companies continue to invest in the corridor billed as a high-tech industrial hub.
COMPLEMENTARY RELATIONSHIP
Kanit Sangsubhan, former secretary-general of the EEC Office, said the government is prioritising the Land Bridge megaproject, similar to policy advocacy for the EEC by the former government.
He said both the Land Bridge and EEC are important projects for Thailand and can complement one another, attracting investment from both local and foreign investors.
If the Land Bridge project is successful it will attract more investment to the EEC, making it a gateway to the global market through air transport at U-tapao airport and sea transport at Laem Chabang deep-sea port to the Pacific Ocean, said Mr Kanit.
If a deep-sea port is built in Ranong, products from the EEC can be transported to the Andaman Sea and the Indian Ocean.
The megaproject would forge a new link between the Pacific and Indian oceans through the construction of deep-sea ports in Chumphon and Ranong, linking them with a 100-kilometre expressway and rail network to transport goods between them.
The Land Bridge would cut shipping time by at least two days, with some ships diverting through the Thai bypass to avoid the crowded Strait of Malacca, he said.
The new route would facilitate the shipment of goods from Thailand to markets in India, Southeast Asia, the Middle East and Europe, said Mr Kanit.
The construction of a deep-sea port in Ranong will create a comparative advantage for investors who make products in the EEC, offering an alternative route to the Indian Ocean, he said.
"The Land Bridge will play a key role in driving the Thai economy in the long term," said Mr Kanit, adding the project is expected to link to the Southern Economic Corridor.
The project, which involves building two deep-sea ports, a motorway, rail lines, and gas and oil pipelines, should improve connectivity and trade along the Southern Economic Corridor, he said.
WAREHOUSES
Apart from reducing logistics costs by an average of 15% by bypassing the congested Strait of Malacca, the Land Bridge offers an opportunity for related businesses, such as international warehouses, said Mr Kanit.
For example, Japanese companies that want to send products to Europe can store their goods in an international warehouse at the Ranong deep-sea port, with a similar warehouse in Chumphon for goods sent to Asean and Asia.
The most likely possibility is the establishment of an agricultural warehouse in Ranong to accommodate agricultural products from southern China, Laos, Cambodia, Myanmar, Thailand, Japan, Taiwan and South Korea to be exported to the Middle East and India, the world's leading importers of such products, he said.
While the Land Bridge is expected to boost trade and investment in Thailand, the project routinely sparks concerns among local communities over its impact on their way of life and the environment.
Mr Kanit said the EEC can serve as a development model for the southern corridor, which includes an education system, community-based environmental protection led by women, private-sector investment in public health, and industrial promotion.
NEW INVESTMENT TARGET
Chula Sukmanop, secretary-general of the EEC Office, recently said the office aims to increase the value of foreign investment to 100 billion baht per year, up from 70 billion annually, in an effort to upgrade the country's competitiveness via the digital sector.
Last month the EEC signed a three-year memorandum of understanding (MoU) with the National Broadcasting and Telecommunications Commission on collaboration to promote investment in the EEC, attract investment from innovation-driven sectors, and knowledge exchange.
Mr Chula said cumulative investment in the EEC totalled 2 trillion baht for the past six years based on Board of Investment promotion certificates.
Actual investment was around 70 billion baht per year.
MINOR IMPACT
Development was slower than expected for some key infrastructure in the EEC, potentially having an impact on the property sector in the three eastern provinces that comprise the corridor.
Investments in industrial sectors have already been made, and new industries have entered to replace those moving out.
Phattarachai Taweewong, research and communication director at property consultant Colliers Thailand, said while the slow development is a negative factor, the EEC projects will eventually proceed.
"The delay was caused by the pandemic, but everyone including investors believe it will still happen," he said.
Property developers that entered the eastern market are not waiting for the EEC infrastructure as demand exists, mainly from workers in several industrial estates where many residential projects posted healthy sales, said Mr Phattarachai.
"Driven by the China Plus One policy, the industrial estate market has experienced significant growth in the post-pandemic period, increasing by 2-3 times after the country reopened, compared with earlier," he said.
Last year Colliers had many clients, mostly Japanese, interested in investing in warehouses and factories through joint ventures with Thai partners, said Mr Phattarachai.
Meesak Chunharuckchot, chief executive of Chon Buri-based developer Life and Living Co, said the property market in Chon Buri, Rayong and Chachoengsao is active.
"If there is any slowdown, it is because of too much supply launched in the market," he said.
"If there is a delay in the EEC, it will have a minor impact on the market."
Despite the departure of many industries from the eastern industrial estates, such as manufacturing of internal combustion engine automobiles, new industries, particularly electric vehicle (EV) manufacturers, are entering from China.
"Existing drivers like the China Plus One policy will continue to propel the industrial sector in the eastern provinces, but with new incentives the property market could experience even more growth," said Mr Meesak.
FOREIGN OUTLAYS ESSENTIAL
Sanan Angubolkul, chairman of the Thai Chamber of Commerce, said the government has in the recent past consistently prioritised the EEC development project to attract foreign direct investment.
This effort was evident as Mr Srettha travelled abroad to persuade major companies such as Tesla and Google to invest in the EEC area.
If significant investors from any group invest in the corridor, the region is expected to thrive, creating momentum that will attract more foreign companies to consider the EEC area, said Mr Sanan.
He said businesses in the corridor informed the chamber there is ongoing progress on various plans within the EEC.
One trend observed by the chamber is an increasing number of Chinese investors in the EV industry from leading companies, in addition to a significant number of supply chain outlays, said Mr Sanan.
Investments are also occurring in the digital industry and sectors related to clean energy.
Investors from Japan and other countries are consistently expanding their commitments to the EEC area, he said.
These developments indicate foreign investors' readiness and confidence in the EEC development projects and global economic prospects as the world gradually recovers from the impact of the pandemic, said Mr Sanan.
These positive outcomes are the result of the government's sincere and continuous efforts to drive the EEC forward, he said.
"Some people may perceive the EEC project as quiet during this period, but the bidding is already open for various infrastructure projects, including ports, airports, roads, or high-speed railways connecting three airports," Mr Sanan said.
"Everything has moved as planned, leaving nothing to speculation. I suggest the government communicate more, especially about the progress of various public infrastructure investments to stimulate greater awareness."
In terms of the Land Bridge, he said it is a significant project the government is working to promote and develop, aiming to upgrade Thailand's competitiveness and economic growth.
The government is building understanding of the project with relevant stakeholders, while encouraging foreign investor participation in the investment, said Mr Sanan.
"Whether this project will materialise depends on foreign investor interest and their perception of the benefits and value of the project," he said.
"We need to monitor the progress of this project."
EEC IN ACTION
Developments in the EEC, including plans to build key infrastructure and invest in high-tech industries, remain active, which is expected to generate new economic value for the country in the future, said Kriengkrai Thiennukul, chairman of the Federation of Thai Industries (FTI).
"The EEC is not ignored or forgotten," said Mr Kriengkrai, also the board director of the EEC Office, commenting on the suggestion the government may be more focused on the Land Bridge project.
The FTI plans to sign an MoU with the EEC Office today to drive more investment in targeted industries, develop industrial clusters and upskill workers to match Thai manufacturing sector demand, he said.
These tasks can serve as a "total solution" for EEC development, said Mr Kriengkrai.
The government wants to develop the EEC, which covers parts of Chon Buri, Rayong and Chachoengsao, into Thailand's high-tech industrial hub hosting 12 targeted S-curve industries.
The industries comprise: new-generation cars; smart electronics; affluent, medical and wellness tourism; agriculture and biotechnology; food; robotics for industry; logistics and aviation; biofuels and biochemicals; digital; medical services; defence; and education development.
Authorities are pushing ahead with the development of key infrastructure under a public-private partnership.
Five key infrastructure development projects comprise a high-speed rail system linking three airports; the third-phase development of Map Ta Phut deep-sea port; U-tapao aviation city; a maintenance, repair and overhaul centre at U-tapao airport; and the third-phase development of Laem Chabang deep-sea port.
Investment in some projects has been delayed because various economic factors changed, he said.
Mr Kriengkrai said factors such as the global economic slowdown and the impact of the pandemic affected the decisions of some prospective foreign investors.
EVS LEAD THE WAY
However, many businesses continue to invest in the EEC area, especially in the EV and EV battery industries, which are being promoted by the government.
Chinese EV maker Changan Automobile announced earlier it plans to start producing sport utility vehicles in Thailand in the first quarter of 2025 after buying 250 rai of land to build a factory in an industrial estate in Rayong.
The Chongqing-based firm wants to increase its investment budget to 10 billion baht, up from 8.86 billion, for expansion from 2023-25.
The higher budget is to support land purchases of 300 rai to build production facilities.
Mr Kriengkrai said he believes the EEC has the potential to draw more investors.
"The government is supporting both the EEC and the Land Bridge, though the effort to promote the latter is newer, which may make it seem this scheme is under the spotlight," he said.
A man walks past a signboard promoting projects at U-tapao airport. Somchai Poomlard
Mr Srettha promotes the Land Bridge project during a visit to Laem Son National Park in Ranong province last month.