The Government of Cambodia has announced plans to construct the Funan Techo Canal to enhance the country’s logistics infrastructure. The 180 km-long canal will connect Phnom Penh Autonomous Port to Kep City and the Gulf of Thailand, providing a direct maritime route and reducing Cambodia’s reliance on the ports of Vietnam. The USD1.7 billion project is expected to be operational by 2028.
This new canal is anticipated to boost the logistics industry, particularly in Thailand’s eastern region. It is expected to increase cargo traffic to Laem Chabang Port in Chonburi province, which is expanding. The ongoing Phase 3 expansion of Laem Chabang Port aims to increase its capacity from 11 million to 18 million TEU containers annually. Once fully operational, the canal is expected to reduce Cambodia’s logistics costs by up to 30 per cent and enhance its connections with other countries.
Additionally, the increased freight traffic to the Gulf of Thailand is expected to create demand for Thailand’s proposed Land Bridge project in Chumphon and Ranong provinces. This THB1 trillion mega-project involves the construction of deep-sea ports and the transformation of transport routes to link these ports, aiming to reduce shipping congestion in the Malacca Straits and cut travel time for cargo.