Tavoy Port (Dawei Port) in Burma is shining again as a deep-sea port on the West after the government last week agreed on promoting it as a main port while Pak Bara in Satun will be used as a minor port due mainly to environmental concerns.
The port is expected to link with inland routes in the Greater mekong Sub-region (GMS), in which Thailand is the centre of every economic cooperation initiative, with lower transport costs and shortened times in a bid to tranship goods and products from the East to the West.
The country's strategic plan for national logistics development took shape when the National Logistics Development Committee chaired by Prime Minister Abhisit Vejjajiva held its first meeting last week.
"Using inland routes via the Tavoy-Kanchanaburi land bridge will help shorten the transhipping time between South China and Andaman seas to six days, compared with 16-18 days by sea via the congested Malacca Strait," a logistics expert said.
Pak Bara Port will then be a local port, carrying not more than 1 million 20-foot equivalent unit containers (TEUs) a year.
Tavoy Port is part of a mega-investment project in Tavoy in the southeast of Burma, which is expected to cost more than Bt300 billion. Besides the Bt50-billion port, there will be an industrial zone nearby and a building complex on 200,000 rai of land, including a road and railway network.
Construction is expected to start this year and be completed in 2020. It is an initiative of Italian-Thai Development, Thailand's largest construction firm, which would seek strategic investment partners for the project.
The company got involved in the project in 2008 when it won a contract from Burmese authorities to survey and construct an inland road linking Tavoy Port to Kanchanaburi, or the Tavoy-Kanchanaburi Highway, as a new land bridge in Southeast Asia.
The four-lane highway is expected to start construction soon with completion in 2013.
Deputy Commerce Minister Alongkorn Ponlaboot has visited Burma several times since early this year to negotiate with Burmese authorities on increasing border trade between the two countries at checkpoints in Kanchanaburi, as well as on resuming the highway project.
This will not only facilitate a freer flow of cement, building materials and equipment for construction in Burma by Thai contractors, but also pave the way for a multi-modal shift from the land bridge in Thailand to the Andaman Sea via Tavoy Port.
The Tavoy-Kanchanaburi land bridge can link with many inland routes, both roads and railways, such as the East-West Economic Corridor (Highway R9), Southern Economic Corridor and North-South Economic Corridor, connecting southern China to Singapore via Laos or Vietnam, Thailand and Malaysia.
political issues
Tavoy Port will be capable of docking any vessel with a 300,000-TEU load. However, the government's decision on a national logistics strategy this time disappointed some logistics operators as they thought the government had a political motive.
The Tavoy deep-sea port was highlighted as the main port due to political issues. The government still does not dare touch Pak Bara Port, as people in the South are concerned about the environmental impact on the tourism industry, a logistics industry source said. One stone can kill many birds if the government uses Tavoy Port as a main port, another source said.
Surely, Burma will benefit the most.
Second, shipping liners who are feeders in the Gulf of Thailand will also benefit from Tavoy Port by getting more work in the Andaman Sea.
Third, industrial estate developers will have more opportunities to invest there. The government will come under less pressure on the pollution problem in Rayong's Map Ta Phut Industrial Estate in the Eastern Seaboard if some manufacturers move their production base in Rayong to Tavoy.
The government will not have to face new pressure that could arise if it goes ahead with building Pak Bara Port as the main deep-sea port because of environmental concerns.
"The government should create its own main port as a western gateway even in the far future, as well as the southern seaboard industrial zone," said Krirkkla Sonthimas, president of the Thai Federation on Logistics.
"Eventually, we must breathe by using our own nose," he said.
Assoc Prof Ruth Banomyong, director of Thammasat Business School, said it depended upon what strategy the country will employ.
"If we believe in the success of regional cooperation, saying that Asean will become a single market in 2020, Tavoy in Burma can act as an alternative main port and gateway towards western markets such as India, the Middle East and Bimstec countries."
Tanit Sorat, vice chairman of the Federation of Thai Industries, said in a recent paper that the shipping route passing the Malacca Strait is now congested. In 10 years, there might be a change in the marine transport model from "land to sea" or "sea to land" to "sea-land bridge" - another choice for economies-of-scale logistics.
"Thailand needs to have a master plan and also an action plan in regard to using and keeping benefits from marine-related transport," he said.
However, to be a regional logistics hub, Thailand should have a clearer logistics plan integrating all transport modes, as well as a deep-sea port that can link the east and west, logistics operators said.
The government should also draw up development plans for a national shipping line and shipyard industry and related industries.