It's the public who will have to decide if the Andaman Sea and the Gulf of Thailand will be connected by the Kra Canal Project - that's what the 1997 Constitution says. "Especially those living where the canal would run," notes Dr Thaveesak Piyakarn, professor emeritus of the Environmental Research Institute of Chulalongkorn University.

At a seminar on the Kra Canal project at Hat Yai on January 15, participants, most of whom were Songkhla residents, voiced their concerns over the lack of information about the project. Panelists attending the Kra Canal: What the Nation and Local Communities Should Get seminar held in Hat Yai on January 15, express their support for the project. The seminar was attended by around 400 people, mostly from Southern provinces.

The seminar titled "Kra Canal:What the Nation and Local Communities Should Get" (first public hearing) was a joint effort of the Subcommittee for the Consideration of the Excavation of the Kra Canal under the House Committee of Military Affairs, the Royal Institute, the Volunteers for Scientific and Technological Assistance (VISTA) and the Prince of Songkhla University in Hat Yai.

The project aimed to assess problems and solutions and gather opinions regarding the project. Most of the 364 participants were locals: 16 provincial and tambon administrators, 91 NGOs , 10 from provincial chambers of commerce, 19 provincial authorities, 107 from educational institutes, one from a provincial Islamic committee, four from hotels, six from municipalities, one from a financial club, one from the Southern Border Administrative Centre, 13 military men, 27 ordinary people, 25 local mediamen and 43 from the sub-committee and VISTA..

Prof Dr Thaveesak, a panellist, pointed out the duty of all Thais, particularly residents who live along the canal route, to decide whether the project should be carried out or not. This, he said, is specified in the Constitution: the public has the right to make decisions over the conservation of land or sea resources.

The Constitution also defines five groups as the public: state, local administrative bodies, local communities, independent environmental organisations including educational institutes, and the general public. "The public decision process makes the Kra Canal Project as something created by the people, for the people, and of the people," he said. He said environmental problems are inevitable with a large-scale project such as this, but added that those involved in environmental impact assessments have prepared solutions.

However, he said, it is not easy to determine the environmental effects of mixing the waters of the Gulf of Thailand and the Andaman Sea. There could be water encroachment into the mainland, oil spills, oil sludge and hazardous chemical contamination. There could be new tourist spots, sedimentation, mangrove encroachment, corrals, sea weed and sea grass destruction, and human mass migration to coastal areas.

A Songkhla resident airs her doubts over the Kra Canal. Economist Pakdee Tanapura said the government should make a feasibility study of the project viability so the public can make an informed decision. Economist Dr Jirakiat Aphiboonyopas said that at least 11 foreign countries have shown a willingness to invest in the project. Aside from revitalising the flagging economy, it would also energise the construction industry. Also, more Thais would invest in the shipyard industry, as well as in the water transportation service which is presently 95 percent foreign-owned. The most direct beneficiary of the 12-year project is the southern economy, he said.

Dr Chienchuang Kalyanamitr, an adviser to the House Committee on Labour and Social Welfare, said the Kra Canal Project has to be integrated into the Kra Canal and Free Trade Zone. Revenues from the integrated project could be up to 1.6 million million baht in 20 years. This profit comes from a joint initial investment of about 800,000 million baht. The canal alone would collect about 9,000 million baht a year or 180,000 million baht over 20 years-equivalent to 17 percent of the estimated 20-year income. Of this, 87 percent will come from various industrial activities in the free trade zone.

Moreover, the project would create about 3 million jobs during the ten-year construction period. (Thailand's unemployed number about four million today.) The full operations of the free trade zone will require some three million workers.

Gen Kitti Ratanachaya, former commanding general of the Fourth Army (the southern region), said he did not see any threat to internal security, despite the separatist movement in the four southernmost provinces. After the Communist Party of Malaya joined the national development plan, internal security has been relatively stable. The separatist movement today is reduced to small groups of bandits extorting from businessmen and merchants, he said.

Questions of Viability

Mrs Kronthip Singhaseni from the Urban Development Fund suggested project funding should be 51 percent from the government, 29 percent from the public, and 20 percent from foreigners. However, inspector general Chaiyos Chaimankhong of the Communications Ministry opposed the project, pointing out that the committee for the study of the viability of the Kra Canal has concluded that the project was not economically viable.

He said the Preliminary Survey Report on Kra Canal Complex 1973 by consultants TAMS and RRNA chose the 5A route (Songkhla-Satun) to create a 102-kilometre long, 198-metre wide and 33.5 metre deep canal for 500,000 tonne gross vessels. This would require an investment of US$3,500 million and take 12 years to construct. According to the study, the project will break even after 50 or 67 years. The report revealed that the Straits of Malacca could accommodate more than 600,000 vessels a year. He said facilities at the ports of Singapore are sufficient to serve sea vessels and that it would be hard for any Asean country to compete.

Question time

The afternoon session heard questions, mostly from academics and Songkla residents. A woman from Muang district said she and other colleagues were concerned about the effects on the residents rather than the benefits of the project. She wanted to know when and where the project would begin and how much compensation will be paid to those who will have to leave their land. Another woman said she wanted to know more project details, and she hoped more time would be given to the opponents of the project to speak out.

A man from Songkhla said residents in his village were living with uncertainity. Some persons came and painted their house poles red. The villagers could not sleep well. They don't know what will happen to their village. Another man said he supports the project 75 percent: he knows the broad principles, but he needs more details to make a final decision. An academic said the Kra Canal issue should be recognised as a national policy by government. Another said such a project was quite large, so a national referendum should be called.

Conclusions

The seminar concluded that the geological survey points to using the shortest canal routes: on the 2A route (Ranong-Chumphon) and the 5A route (Songkhla-Satun). Both are promising and need further study. Environmental issues will follow after the route has been selected. The seminar also conclude that central, regional, and local state organisations and NGOs should work on the environmental impact assessment.

As for security, although there is an on-going separatist movement, it doesn't constitute much of a threat. Government should study the issue. The Kra Canal can enhance internal security and contribute to the efficiency of the Armed Forces. The canal will bring many benefits, the seminar concluded, including establishing a new economic centre and providing jobs for to up to five million people for ten years while the project is being built.

Public opinions expressed at the seminar indicated that the Kra Canal should be kept on the national agenda, discussed nationwide in Parliament and the Cabinet and subjected to a national referendum. In addition, funds for public information should be set aside. Southerners should discuss the project before designating the canal route. There should be more studies on the effects of the project, including effects on large southern industries such as rubber.

Opinions from international ocean liners should be gathered. More public relations work should be done with the local residents. More studies are also needed into the potential impact on Thailand's competitiveness in the world market.

Group Capt Art Thavilwang, secretary of the Subcommittee for the Consideration of the Excavation of Kra Canal, said local residents in the South would receive more information about the project. The subcommittee agreed that the project is viable but that there is still a need for social studies of local communities, which should commence soon. The subcommittee is currently gauging public opinion to pave the way for the referendum. Over 50,000 postcards have been distributed nationwide, of which over 30,000 have been returned. About 80 percent of respondents are in favour of the project, 10 percent remain unsure and another 10 percent disagree, mainly due to concerns about environmental repercussions and the separatist movement.

JUST THE BASIC FACTS

Why use the Kra Canal?

The canal would shorten some sea journeys by as much 1,000 kilometres, or up to three days. This would save US$37,000-120,000 per voyage. Navigation through the Kra Canal would be safer than current routes. It would avoid the shallows and shifting sands of the Straits of Malacca, so reducing the chances of running aground. It would also avoid piracy in the Straits.

What's in it for Thailand?

The Kra Canal will require huge labour resources and spur economic activity in coastal areas and agricultural and industrial centres. Thailand will become a major new trade centre with considerable earnings from navigation fees and transportation services. Related port developments will also strengthen the economy. In addition, the project will benefit neighbouring countries, such as China, Japan and India, through knock-on expansion of regional trade. The canal will also cut the cost of transporting oil from the Middle East and alleviate traffic congestion in the Straits of Malacca, through which over 100,000 vessels pass annually.

Thailand will also become a regional centre for commodities, currency trading, offshore financing, transshipment, high-end tourism and export processing industries. Connecting the Indian and Pacific Oceans through the Kra Canal will create a new international strategic trading centre. Over 1,200 million inhabitants of countries within a radius of 2,400 kilometres of the Kra Canal will benefit from an annual trade turnover estimated at $280 billion.

Where will the investment come from and how will investors be paid?

By allowing the public to buy shares in the project, they will feel part of it. Foreign investment may take various forms, including technology exchanged for profit-sharing under joint management schemes or canal operating incentives, etc.

How will funds be raised?

By establishing a public company with 51 percent of the shares held by the Thai government, 29 percent by the public, and 20 percent by foreign investors.The government could borrow say 100,000 million baht from multilateral lending agencies and commercial banks against an issue of bonds. The Thai public could be invited to buy shares offering commercial bank interest rates in addition to capital growth. Foreign shareholdings could take the form of 30-year debentures, with dividends and 20-50 percent discounts on navigation fees.

And the total cost?

According to the most recent estimate, the project will cost 500 billion baht, depending on how much local resources are used. This would pay for construction of a two-way canal 25 metres deep and 400 metres wide.

How much will it earn?

Revenue will be derived from navigation fees, export tariffs, tourism, land bridge toll fees, income tax, land development, aviation and shipyards. By the third year of the project it is envisioned that the canal will generate 3 billion baht annually and as much as 100 billion baht upon completion after 10 years.

MANAGING THE PROJECT: If it is ever to become a reality, the Kra Canal megaproject will have to draw on the combined strengths of numerous parties. So who will manage it and invest in it?And, above all, what are the chances of failure?

Late in November, 1998, a Kra Canal seminar with the theme "Job Creation and Nation Building" underscored two key points: first, that foreign countries are more interested in the project than the Thai government, and second, that Thailand must have sovereignty over the canal. The seminar, held at Chulalongkorn University, was attended by Volunteers in Scientific and Technological Assistance (VISTA), the Environmental Research Institute of Chulalongkorn University and the Urban Development Fund. In all, about 300 delegates attended, including academics and representatives of the private and public sectors.

Moving Forward

As a basis for on-going discussions, the seminar made the following observations:
- The Kra Canal project was first initiated over three centuries ago.
- Foreign countries have supported the project more than Thais.
- The project has the potential to create jobs and boost the country's economy.
- Thailand must have sovereignty over the canal.
- All Thais must share their ideas, jointly invest in and implement the project and agree on the exploitation of national resources.

The delegates also agreed to propose the project to His Majesty the King to commemorate his 72nd anniversary.

A petition supporting the project was submitted to the seminar signed by 2,500 residents of Ranong. The seminar recommended that the project should be a long-term investment, with profits not expected until at least the third year of operation. It also agreed that only Thai resources should be used for the excavation, dredging and expansion of the canal so as to minimise costs. Essential foreign technology should be exchanged for profit sharing reductions in canal passage fees (perhaps 30-50% for 10-20 years) rather than purchased outright. Countries wishing to invest should be allowed to jointly manage the canal, but only in accordance with Thai sovereignty.

The seminar discussed all aspects of the project, including chronology, security, economics, environment, oceanography, geology, construction and international relationships. Almost all participants were in favour of the project on economic grounds. During the seminar, a private company, the Asian Group Consortium, pledged to implement the project on a turnkey build-operate-transfer basis. According to Mr Vichai Phanphokha, a prominent banker, a European group also pledged to excavate the canal within a year and finance it on a turnkey basis.

Early History

The Kra Canal was first proposed in 1677, during the reign of King Narai the Great and revived by King Rama I's brother in 1793, during the early Rattanakosin period. King Rama III revived the project again in 1858, followed by King Rama V in 1872 and 1882. Next came King Rama VI, who looked at the project in 1917. In all cases, the project was driven back not because of financial constraints but due to security fears.

More recently, the project was examined in 1932 during the Pridi Bhanomyong regime and proposed by big businessman Chao Chaokwanyuen in 1960. Next came proposals from Admiral Amorn Sirikaya, Chumphol Silpa-archa and Yupha Udomsak, all politicians, in 1982. Over the next two years more politicians, including Rear Admiral Sanong Nisalak, Mr Sawai Phattano and Mr Wattana Assavahem, expressed their desire to revive the project, as did Prof Dr Arun Sorathes and VISTA in 1986.

However, security fears continued to dog the project's progress. In 1998, as Thailand reeled from its most severe recession ever, the Kra Canal was again dusted off and proposed as a means of solving the economic crisis, including widespread unemployment.

Various Routes

Altogether ten canal routes have been proposed to connect the Andaman Sea to the Gulf of Thailand. Howver, according to VISTA, only two routes warrant further study.

- 5A route (Satun-Songkhla) runs 102 kilometres across mostly flatlands, thereby obviating the need for watergates.
- 2A route (Ranong-Langsuan) is 90 kms long and follows natural river courses and waterways. The route is obstructed by a mountain ridge but offers better access to major Thai ports such as Laem Chabang.

The seminar also looked at other similar canals around the world, noting the narrowness of the Panama and Suez canals (about 150 metres) and how both canals accommodate ships to a depth of 11 metres. In 1997, 15,000 vessels sailed through the Panama Canal carrying 200 million tonnes, contributing about US$464 million in revenue and supporting a workforce of 8,000. Meanwhile, over 100,000 vessels weighing over 700 million tonnes pass through the Straits of Malacca annually, helping to create one of the region's leading powers, Singapore, despite its having a geographical land area less than Phuket and a smaller population than Bangkok.