Tan Kin Lian - Perspectives Feasibility of Kra Canal
Will the Kra Canal be feasible?

Each year, 85,000 ships passes through the Straits of Malacca. One third are container ships.

The Panama Canal is 82 km, Suez Canal is 193 km and the Kra Canal is 100 km.

Each year, 19,000 ships pass through the Suez canal and 17,500 ships pass through the Panama Canal.

I estimate the 18,000 ships can pass through the Kra Canal. This represents about half of the container ships that passes through the Straits of Malacca.

A container ship traveling through the Kra Canal can save about 1.5 days of travel time. This represents a saving of US$100,000 in expenses.

If the Kra Canal levies a toll of $100,000 for each container ship, the annual revenue of the canal is $1.8 billion.

The estimated cost of building the Kra Canal is $25 billion USD. This represents a payback period of 13 years.

If the toll is $50,000 (to make it attractive for the ship owner, the payback period is 26 years.

The Kra Canal is marginally feasible.

Tan Kin Lian
 

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