Can 'Land Bridge' ignite growth?
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Can 'Land Bridge' ignite growth?

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An artist’s interpretation of a deep-sea port as part of the Land Bridge project proposed by the Pheu Thai-led government.
An artist’s interpretation of a deep-sea port as part of the Land Bridge project proposed by the Pheu Thai-led government.

Thailand has long struggled to escape the middle-income trap. Despite its strategic location at the heart of the Association of Southeast Asian Nations (Asean), the country continues to trail regional peers in GDP growth, capital market performance, and infrastructure competitiveness.

Political instability has only worsened this challenge. Amid weak domestic consumption and external trade pressures, the government has turned to massive infrastructure development as a key stimulus measure. Central to this push is the controversial "Land Bridge Project", positioned as a transformative logistics corridor linking the Andaman Sea and the Gulf of Thailand. But is this project a game changer--or another overpromised, under-delivered megaproject?

Across Southeast Asia, infrastructure development has become a popular lever for economic revitalisation, not only to boost short-term employment but to reposition countries within regional supply chains. Thailand's strategic vision is no exception, but execution challenges remain formidable.

Still in the feasibility stage, the project involves two deep-sea ports (Chumphon and Ranong), a 90-kilometre transport corridor with road, rail, and pipelines, and a target capacity of 40 million TEUs per year. While the project is expected to cost 1.1 trillion baht (US$28 billion), it could reduce shipping costs by 15% and delivery time by four days, offering a detour from the Strait of Malacca.

The government forecasts an economic IRR of 17.4% and job creation of 280,000 positions if this infrastructure project succeeds. In early 2024, parliament approved advancing the feasibility study with bipartisan support. However, the response has been cautious, reflecting both specific and systemic concerns.

At the core of the hesitation lies a classic disconnect: broad macroeconomic benefits do not always translate into clear-cut investor returns. Port operators with concession rights may not be able to monetise GDP growth -- they require visible revenue or cash flow streams when relying on external borrowings. In the absence of long-term shipping commitments, user fees, or offtake agreements, investors must shoulder unquantified demand risk.

Thailand's proposal follows a public-private partnership (PPP) model, where the state acquires land and the private sector often builds, operates, and owns infrastructure assets at their own cost over the agreed period. But without clarity on tariff structures, currency-denominated revenue, or legal safeguards, the infrastructure project remains risky -- especially in a country with a weak record in regulatory consistency and contract enforcement.

A good example comes from the Eastern Economic Corridor (EEC), launched with similar optimism. Despite generous tax incentives, foreign investment has lagged expectations, with logistics and digital projects delayed by legal opacity and dispute resolution concerns.

PPP financing in emerging markets frequently falters due to a misalignment of stakeholder expectations: governments seek long-term investments without guarantees, while investors seek revenue visibility without legal uncertainty. Bridging this gap requires policy maturity and credit-enhancing structures still evolving in Thailand.

Investor sentiment is shaped not just by the project, but by Thailand's broader economic context. In April 2025, the IMF revised Thailand's GDP growth forecast down to 1.8%, the lowest in Asean. Over the past 18 months, the SET Index has fallen nearly 20%, making it Asia's worst-performing major stock market.

Rising interest rates, baht volatility, and a weak equity market complicate the infrastructure investment outlook.

To move from vision to execution, Thailand must address key investor concerns. Among solutions to help investors are transparent feasibility studies with realistic traffic and shipping forecasts, risk mitigation, clarity on tariffs, concession terms and fair appraised return-sharing.

Resistance from southern fishing communities continues, citing resettlement, environmental, and labour concerns. Transparency and compensation will be critical. Strategically, the Land Bridge may let China bypass the Strait of Malacca, expanding its Indian Ocean logistics reach. If supported under the BRI, geopolitical sensitivities will rise -- particularly for Japan and the US.

Thailand must balance Chinese capital with political independence. US-Japan initiatives like the Blue Dot Network and PGII emphasise governance and transparency -- principles that could add legitimacy to the project.

Thailand has the geography and ambition to pull this off. But investors won't be persuaded by projections alone. What matters is governance: policy stability and legal safeguards.

The Land Bridge may yet become a signature achievement. But unless demand uncertainty, regulatory opacity, and fiscal limitations are addressed, even a 17% IRR may prove irrelevant.

Strategic infrastructure only advances economies when it earns investor confidence. Thailand must prove it can do both-- and perhaps set new benchmarks for institutional credibility.


Dai Kadomae is a Thailand-based strategic finance advisor and former CFO with over 25 years of experience in cross-border capital markets and infrastructure investment.

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