As one who followed very closely the tumultous movements of India’s Sethu canal project and its environmental and security impact on Sri Lanka, I now wonder why we overlooked, if not remained ignorant of the 200-year old dream Kra canal project of Thailand, which could herald an economic boom in Sri Lanka.

The Thai National newspaper The Nation on September 29th 2008, in an article under the heading "Kra Canal –centuries old idea that refuses to die" declared that "only Kra Isthmus canal could beat Singapore as a famous destination and short cut through the Straits of Malacca.’’ Malaysia’s former Prime Minister Mahathir noted recently, to General Chavalit that the "Kra Project would be good for the region even though Malaysian Port’s business would suffer if it went ahead" (Bangkok Post May 10th 2002). This observation by Mahathir, one of Asia’s outstanding leaders, reinforced and confirmed Sri Lanka’s opportunity to take Singapore’s hub port business to Hambantota.

According to Thai authorities and media, China, Japan, Malaysia, Indonesia Germany and France are among the countries that have expressed their interest in participating in the USD 30 bn. project. The reason for such multinational interest is obvious. Kra canal to be cut across the narrow isthmus of S. Thailand would enable ships on one of the world’s busiest Asia /Europe route, to cut across from the South China Sea to the Indian Ocean without going through the treacherous Malacca Straits. It would shorten the distance by 1,500 nautical miles. The savings on fuel and time for ships could be as valuable for international trade as provided by the world’s other two major canals –Suez and Panama.

While East Asian countries including China are excited by the most favourable prospects, USA, purely for security reasons has already shown signs of uneasiness about not being able to block the Malacca Straits in the event of a war with China. Its new strategic ally, India, is in the same boat. Kra canal will be the biggest pearl in China’s "string of pearls," as the Pentagon call it, to secure its oil route.

While we remained blissfully ignorant of one of the world’s most important infrastructure projects in a neighboring country which could enormously and favourably impact Sri Lanka, series of measures have been taken by Thailand to implement the project. A Bill on the project was passed by the Parliament in September 1988, seminars were held, feasibility studies were done and foreign countries ranging from China, Japan Malaysia, Indonesia in the east and Germany and France and USA in the west took an interest in the project. Thai media gave publicity to all this for several decades, while our embassy in Bangkok appeared to have turned a Nelsonian eye.

While legendary Ram-Sethu is blocking India’s Sethu Canal, Thailand’s 18th Century King Rama 1 pronounced the plan to cut the Kra canal to join the Indian and Pacific Oceans. The first records of the project appeared during the reign of King Narai of Ayudhya in 1677. However due to concerns over security at that time the idea remained a dream.

The 200 year old dream has been revived again and again in the 1950’s early 1970’s in late 1980’s, 1990’s and now in the early 21st Century. Numerous obstacles ranging from perpetual political instability, military coups and financial constraints prevented the fulfillment of the dream. But one thing is certain, according to experts, several auspicious pro-canal developments - economic, security and political - will make the project a reality in the very early party of the 21st Century. The energy crisis or the need to cut fuel costs of ships and China’s focus in the defence strategy to protect trading routes, could be the determining factors.

Both USA and India threatened to block the Malacca Straits in the event of a war with China. That threat could only push the project forward. Thais see the canal as an excellent means to raise capital to propel its massive industrialization and as a foreign exchange money spinner for the Thai economy, like the Suez and Panama canals did for Egypt and Panama. It was in the 1950’s that the canal for economic purposes was first proposed. The plan was shelved at that time due to heavy cost. 20 years later the plan was revived, but the student riots in 1973 and the resulting downfall of the military government combined with political instability left no space for the long range monumental infrastructure project like the Kra canal.

10 years later, South East Asian region as a whole became interested in the project. By 1983 the Industrialized countries of the region felt the need for a canal for trade purposes and as a viable cost effective project. In Japan, Mitsubishi Research Institute (MRI) recommended the canal project to facilitate Japan’s external trade, besides the need for easy and inexpensive access to oil from the Middle East. Many in the government opposed the plan claiming the low cost of oil would not make the canal cost efficient. In Thailand itself, the government became more intensively engaged in the issue. Commander of the S. Army Harn Leelnand initiated a national symposium to debate the project. This was followed in October 1983, by an international seminar on it. Interestingly former US Presidential Advisor, General Robert La Roque, then Director of the Centre for Defence Information, explained at the Seminar that South Thailand would benefit from the canal. Under his leadership the canal route was determined among eight proposals and the cost was estimated to range from USD10 to 12 billion.

In 1985 the first pronouncement of actual construction was advanced. The Mitsubishi Corp of Japan claimed that it had the technology to build the canal and announced that it would tender for the contract. However, Mitsubishi’s plan to use underground nuclear explosions was rejected by the Thai scientists involved in the project. Undaunted, MRI canvassed two US concerns to create Global Infrastructure Fund (GIF) and the first project recommended was the Kra canal. The Thai government liked the idea of globalizing the cost burden. Subsequently the government endorsed an official feasibility study. By 1988 security arrangements involved in such a project drew increased attention. The USA refused to defend the canal alone. This worried the Thai officials. Despite these drawbacks, the Thai internal debate continued. In September 1988 a Bill was passed by the Thai parliament endorsing the plan to implement the project. A committee was established to monitor the progress. (Lloyd’s List Sept 7th 1988).

Once again the project suffered a set back when in 1989 the Thai PM Chatichai declared that oil prices were too low to make the project feasible and instead a advocated a pipeline across the Isthmus. Environmentalists promptly opposed the pipeline claiming that the potential for an environmental catastrophe would be increased. The canal project too found new opposition from environmentalists. Hence MRI one of the key architects of the Kra canal adopted a new tactic. In association with the GIF, MRI chief Norio Yamamoto said "If we find a project promising, we will appeal for co-operation from other countries and from multinational teams". As has happened to the Sethu Project it is not unusual for a mega project like the Kra canal to suffer set backs. It happened to the Panama Canal project as well, Unlike the Sethu Project, the Kra canal cannot lead to cross border disputes. In fact the Thai canal project is supported by a consortium of leading maritime countries, while Sethu, a purely Indian coastal shipping project, has no support even among the Indian shipping community.

Kra is still being promoted by former PM Chavalit. It is now estimated that the canal will cost 500-800 million bhat and the canal is expected to handle 2bn tones of cargo annually. By comparison, the Sethu canal is expected to handle 3,000 ships p.a. and approximately 90m tones of cargo annually.

Thai national newspaper The Nation reported on 14th August 2006 that with the new elections coming up interest in the canal project was increasing again. Kra canal project will have both economic and security ramifications for the region. USA which supported the project in the 1980’s now sees the project as a part of China’s military plans or the `string of pearls’ strategy. Thai Daily Times on January 19th 2005 reported that the Kra project has raised concerns at the Pentagon. Perhaps in response, China pro canal articles appeared with headings "Abandon the Malacca Straits and build the Thai Kra Canal" sub-titles declared "This is shaking S. Asia". Still in Sri Lanka we remained silent and blissfully ignorant too.

I have sought to describe the steps being taken in Thailand supported by several maritime powers to implement the Kra project, to draw the attention of our policy makers and enlighten the public who have been kept in the dark largely due to an incompetent and indifferent foreign service. While we chased Sethu Project due to both environmental and security concerns, in India itself Dravid Peraval urged the government in November 2007 to corporate with Thailand in the speedy construction of the canal as an Indo Thai joint venture, in order to open a new sea way to the east.

Both Sethu and Kra canal are bound to affect Sri Lanka and both projects refuse to die. The impact of Sethu canal on Sri Lanka can only be negative, the Kra canal on the other hand could provide a grand opportunity for Sir Lanka to combine Dubai and Singapore into one in major economic development particularly in the South. Hence both projects need to be monitored closely. While the Foreign Ministry has been monitoring Sethu assisted by a Cabinet appointed Secretaries Committee and an advisory group of eminent scientists, no one – not even the Ministry of Ports and Aviation - appeared to be aware of the Kra project. It is not the fault of the Ministry but a disturbing failure of our economic/ shipping intelligence services.

Potential benefits from the Kra canal will not fall on Sri Lanka’s lap like manna from heaven ! long term and meticulous planning is required. Monitoring and gathering information on the project is an immediate necessity. An attempt will be made to elaborate on further steps to be taken by Sri Lanka in a follow up article.

(The writer is a retired Director of Merchant Shipping who has served Sri Lanka’s overseas missions as Trade Attache)