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The Thai Canal – cutting through the project’s hype

Tanutam Thawan

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(Photo from mothership.sg)

September 11, 2017 was the latest gathering of minds related to the challenges in establishing the much-discussed Kra Canal (now referred to as the Thai Canal) in Bangkok. The canal, if it happens, would slice a new shipping canal through the the slimmest section of the Malay Peninsula, anywhere from Chumpon to south of Phuket.

The Thai Canal Conference attracted an array of experts in their various fields including Chinese investors ready and willing to invest between USD $29-35 billion to construct this mega project which could become a ‘Legacy Project’ of the current NCPO Government.

(Graphic from wallstreetdaily.com)

Over the past 300 years much has been said and recorded about proceeding with the Kra Canal. Obvious concerns from Singapore and Malaysia has planted doubt and concerns in previous Thai administrations but with the recent developments of the Silk Road & Steel Belt rail routes, whereby containers once carried by ships from China to Europe and taking around 45 days,  now has competition from the new rail links.

At the moment a single rail track is in operation but the Chinese are quick to announce that by 2020 some 7.5 million containers will be going by rail. Where does that leave the already under pressure shipping lines (all of which are showing operational losses globally)?

(Graphic Forbes.com/Drillinginfo)

To speed up the maritime transit times between China and Europe the shipping lines will be forced to evaluate ‘Off-Route’ Hub Ports such a Dubai (Jebel Ali) and attempt to stick to the most efficient routes (without diversions). The Thai Canal could greatly assist that process by shaving off up to 3 days in each direction.

But how to pay for it as an investment of USD$29-35 billion?. It’s no small sum of money and this may be what has scared off Thai Governments to support the project so far. Free Zone expert – Tony Restall (President & CEO of DSI Ltd) presented the case for the Thai Government to follow the investment example of Dubai (United Arab Emirates) which has witnessed phenomenal growth of its ports and free zones since its first free zone was established in 1985. In 2015 the Emirate of Dubai posted a ‘Free Trade throughput’ total figure in excess of USD $500 billion (*Source –Dubai Economic Department) with Jebel Ali Port and Free Zone posting USD $140 billion of that total.

To prove that a similar free zone regime would be successful in Thailand, Tony is challenging the current Thai administration to set up a pilot scheme using Phuket Port as the guinea pig. This is not new to Phuket as Tony proposed the establishment of a Free Trade Zone in 2004 following what he witnessed happening to the Phuket economy after the tsunami.

In 2006 he presented the case for a Free Trade Zone in Phuket to the then Secretary General to the Thai PM, General Pongthep Tesprateep, who in turn endorsed and supported the submission. Tony Restall even brought Middle East investors from the UAE as well as Qatar to Phuket who were ready to commit the investment into Phuket. The coup of 2006 put everything on hold and investors took a step back as the investment risk into Thailand was increased.

Phuket Port still sleeps having lost its annual 32,000 Containers per year trade and the consortium proposed by Restall were ready to construct a new quay extension, passenger jetty and international ocean terminal. “Everything is back on the table if we can seek the support of the Thai Government and Phuket Administration to utilise Phuket Port as the trial facility that will ultimately create between 5-6 Million new jobs in the Thai Canal corridor and contribute significantly to the GDP of Thailand”, says Tony.

“Sure, we can bring in foreign investment to develop Phuket Port and establish a Free Zone Phase 1 Trading Hub” says Restall but given the excellent return on investment he believes that there would be more than sufficient interest from local investors as well.

“Let’s use Phuket as the testing ground and this can then be replicated all over Thailand (Sea Ports, Airports and Border Crossings). Free Trade Zones shouldn’t be confused with SEZ – Special Economic Zones. Thailand’s Dawei Project was launched as an SEZ and hasn’t delivered as expected.

“Our plans are to introduce a weekly sea feeder service into Phuket Port linking up Singapore, Kuala Lumpur and Penang Ports and linkages to Myanmar ports to the north. The success of the UAE Free Zones is well recorded and has witnessed tremendous growth both inside and outside the Free Zone location.

“A Town Hall meeting in Phuket would provide the business community and local population with a unique insight to see the benefits associated with a successful Free Zone regime and professionally run Sea Port with Sea Feeder access to short sea routes.

“This is a win-win situation for all those involved”. Tony claims that one established (3-4 years) the Free Zone alone could easily contribute USD $2-3 billion into the economy of Phuket much as it has been proved in smaller Free Zones in the UAE.

Check out the Thai Canal Facebook Page

Send Tony an email [email protected]

Further reading from Forbes.com

Further reading from Mothership.sg

- Tanutam Thawan

Local Thai journalist speaking fluent Thai and English. Tanutam studied in Khon Kaen before attending Bangkok’s Chulalongkhorn University.

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Thai Airways to end its Samui flights this September

Tanutam Thawan

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PHOTO: planespotters.net

Thai Airways is scrapping its Bangkok-Samui flights from September this year. The airline’s been flying Bangkok to Samui, return, twice a day in a Boeing 737 carrying up to 149 passengers.

It negotiated a contract with Bangkok Airways to fly the two flights into Koh Samui, which built and manages the island’s airport since 2008.

At the time, the national airline said it would be convenient for travellers flying though Bangkok on Thai Airways to to transfer to a TG flight to the island, booking through the one airline.

It was also considered a breakthrough at the time ending a monopoly on the Bangkok-Samui flight sector. Bangkok Airways dominates the route offering around 19 flights daily each way.

Thai Airways are justifying cancelling the service this September following the signing of a codeshare agreement with Bangkok Airways last year. The airline can ticket its European or Asian passengers through to Samui using any of the Bangkok Airways daily flights at agreed fares that are competitive for TG to resell.

The monopoly for Bangkok Airways means that flights cost up to more than double for similar distance routes around the region.

Samui Island’s airport was developed as the first privately owned airport, but faced constant criticism from hoteliers on the island who claimed Bangkok Airways made it difficult for competitors to serve the island.

At one point the government threatened to build a second airport on the island, but land appropriation costs were too high. However, the tactic did result in THAI gaining landing rights for two flights daily.

According to Airlineroute’s timetable information, Thai Airways will end its TG281 service that departs Bangkok at 0745 and TG 287 that departs Bangkok at 1530 on 2 September.

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BMW eyes bright future for electric cars in Thailand

The Thaiger & The Nation

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That growth makes Thailand number three in the world in terms of market acceptance of PHEVs, according to Krisda Utamote, BMW Group Thailand’s director of corporate communications.

Christian Wiedmann, president of BMW Thailand, says the German carmaker would continue churning out new electric vehicle models due to confidence in its global market expansion, with Thailand included.

“In Thailand, BMW is expanding the market for plug-in hybrid electric vehicles (PHEVs) over the past three years. Sales have increased 44 per cent per year,” Wiedmann said recently at the BMW head office in Munich.

Wiedmann told Thai media the focus for BMW Thailand would now be on selling PHEVs, which had seen a rapid market growth worldwide. At this point, BMW will not import battery electric vehicles [BEVs] for sale in Thailand as it is still trying to determine the local demand and consumer response to fully electric cars, said Wiedmann.

Unlike PHEVs, that also can run on petrol, BEVs are powered entirely by electricity and have no engine or fuel tank. Wiedmann said that like their counterparts elsewhere in the world, Thai motorists have concerns regarding fully electric cars.

“We will see if there is a market for BEVs in Thailand,” he added.

Christian Wiedmann, president of BMW Group Thailand. PHOTO: PTT/Kampon Termkijanan

Many motorists are worried that they may run out of power while driving a fully electric car for a long distance. Charging stations are not yet widely available like petrol stations, particularly in the provinces or rural areas. However, thanks to improved battery technology, newer models of BEVs can run a longer distance for each charge, up to 250-300 kilometres for the BMW i3, which has a “range extender” to generate more power to the battery.

The compact i3 model is popular in Europe and the US. But BMW has no plans to officially market it in Thailand anytime soon, according to Krisda. He added that certain Thai agencies imported i3 cars mainly for research purposes.

Fully electric cars are more suited to smaller countries in Europe, while motorists in countries with larger areas and longer distances like the US may prefer plug-in hybrid vehicles, said a BMW expert who asked not to be named.

BMW offers charging services for EVs through its subsidiary ChargeNow, which has more than 100,000 charging stations the world over.

In Thailand, ChargeNow offers charging services to electric vehicles of all makes registered with its website, and not just BMW’s EVs, Krisda said. It plans to build 50 public charging stations at BMW dealerships and partnership locations by the end of this year.

Another partner in the charging services, GLT Green (Thailand) Co Ltd, which specialises in EV charging technology, has set up 73 charging outlets throughout Thailand and is adding another 47 outlets by mid-2018, according to the company’s business development manager Chayaphol Leeraphante. Altogether, GLT Green plans to set up as many as 160 charging outlets this year, he said.

ORIGINAL STORY: The Nation

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Property report tips Phuket property boom

The Thaiger & The Nation

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According to Knight Frank Thailand’s research, the Phuket condo market is expected to perform better in line with the brighter economic situation and the growing population of the island.

Increasing supply and higher selling prices will be the key drivers, while demand is forecast to improve slightly. The number of launches in Phuket is predicted to increase and Thai developers as well as joint venture developments will be key players in the market.

According to research, demand across the market will continue to be driven by international homebuyers, investors and expatriates, especially those from China, Russia and Australia.

“Besides, the expectation to see a larger portion of buyers from South Korea. Average asking prices per sqm are anticipated to rise in all areas, while increasing demand for luxury condominiums may see prices approaching a new high in 2018, especially properties by the sea,” the report from Knight Frank said.

It said one factor that is expected to significantly help boost the property market in Phuket is the Smart City project that aims to develop the province and to set the city up as a hub for the digital industry.

The project is due to be completed in 2020.

More about DEPA and the Smart City HERE.

Search for over 7,000 Phuket properties HERE.

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