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Thailand Explores Development of Ports for Large Cruise Ships, Attracting Private Sector Investment

Pattaya City, known for its vibrant tourism industry, is set to welcome a new and exciting development that will undoubtedly capture the attention of both local and international travelers. The Department of Port, renowned for its expertise in harbor engineering, recently held a Technical Hearing to present the innovative concepts and designs for the forthcoming Cruise Terminal, a project estimated at a staggering 7.4 billion baht.

On June 29, 2023, Mr. Wanchai Butrotdee, the Director-General of the Department of Port, presided over the meeting, inviting more than 50 stakeholders, including investors, to gather their invaluable insights and opinions. The aim was to address the technical aspects, design elements, and potential construction impacts of the proposed Home Port, specifically tailored for large cruise ships. The project area encompasses prime locations within Bangkok Metropolitan, Samut Prakan, Chachoengsao, and Chonburi provinces.

During the session, Mr. Wanchai emphasized that the Cruise Terminal development in Pattaya, situated in the promising area of Balihai Cape, Chonburi province, was carefully selected due to its proximity to various tourist attractions, ensuring a high potential for drawing an influx of passengers. The proposed Hybrid Terminal, serving as both a Home Port for vessels carrying up to 1,500 passengers and a Port of Call for ships accommodating 3,500 to 4,000 passengers, is expected to enhance the region’s tourism industry significantly.

To ensure a comprehensive and well-executed plan, the Department of Port has appointed a consortium of reputable consulting firms for preliminary design, feasibility studies, environmental impact assessments, and analyses, following the Public-Private Partnership (PPP) model. The consortium comprises C-Spectrum Co., Ltd., the Research and Consultancy Office of Thammasat University, International Channel Engineering Consultants Co., Ltd., Southeast Asia Technology Consultants Co., Ltd., and PriceWaterhouseCoopers Co., Ltd., with a budget of 68 million baht.

The initial phase of the project involves the meticulous design and study of the proposed Cruise Terminal, which will be followed by another meeting scheduled for August 2023. Subsequently, the findings will be presented to the Ministry of Transport and the State Enterprise Policy Office (SEPO) for their consideration and approval within the same year, 2023.

According to the outlined roadmap, the project will issue an official invitation for private sector participation in 2024, with a construction timeline of three years. The Pattaya City Cruise Terminal is expected to open its doors to visitors in the year 2027, with a maintenance and operation agreement spanning 30 years. The investment model for this project involves a collaboration between the government and private entities, where the state will invest in infrastructure, such as the terminal and access routes, while private investors will contribute to passenger facilities and other conveniences.

Given that the revenue generated solely from terminal operations may not be sufficient, additional activities and amenities will be incorporated within the terminal vicinity to create supplementary income streams. Notably, the new terminal will be constructed approximately 1 kilometer offshore to maximize land reclamation and facilitate the accommodation of large vessels, with a draft depth of 12-14 meters and the capacity to handle two cross-berth cargo ships of up to 236,000 gross tons simultaneously. The total length of the berth will span 420 meters, with the passenger terminal accommodating 3,500-4,000 passengers per trip. Other facilities will include waiting lounges, security checkpoints, passenger check-in counters (60 lanes), immigration counters (26 lanes), and parking spaces capable of accommodating 132 cars and 82 buses.

Preliminary estimates for the total investment amount to 7,412 million baht, divided as follows: 1. Investment cost of 5,934 million baht (including 4,315 million baht for the construction of off-shore infrastructure, 2,881 million baht for passenger terminals, 675 million baht for the bridge connecting the port, 567 million baht for parking lots, and 192 million baht for passenger terminals and high-speed boats). Equipment costs amount to 400 million baht, land rights registration fees amount to 608 million baht, and road elevation costs amount to 1,611 million baht. 2. Operation and Maintenance (O&M) costs amount to 1,478 million baht. The investment scope between the government and private sector is divided into government investment totaling 5,534.56 million baht (66%), and private sector investment totaling 1,877.66 million baht (34%). The equipment and facilities are managed for 30 years, with a return rate of 20% and a payback period of 10 years.

A study was conducted to estimate the number of ship arrivals, approximately 60 arrivals per year, with an additional 100 arrivals over the next 10 years. The projected revenue proportion from port operations is estimated at 73% (3,730 million baht), including fees for vessel berthing and port transit fees. Commercial operation revenue accounts for 27% (1,390 million baht), including rental fees for space, parking fees, ferry docking fees, and speedboat services. The Port Authority has conducted a study on developing a port capable of accommodating large cruise ships, consisting of three projects under a public-private partnership.

These projects include:

1. A large cruise ship terminal on Samui Island in Surat Thani Province, which is currently being prepared for submission to the Ministry of Transport and the Office of the State Council.

2. A large cruise ship terminal in the vicinity of Bali Hai Cape in Pattaya City, with the study expected to be concluded this year.

3. A large cruise ship terminal in Laem Pong Bay, Krabi Province, which is still under study.

Based on the study, there is significant private sector interest in investment, including port operators and international cruise lines, due to Thailand’s tourism potential. Thailand ranks third in Asia in terms of cruise ship arrivals. The objective of developing ports to accommodate large cruise ships is to connect transportation and tourism, generating income for the country from middle to high-end tourists. Currently, Thailand receives approximately 500 cruise ship arrivals per year. However, large ships are unable to dock at ports due to water depth constraints, necessitating tendering operations to transport passengers to shore using smaller boats, which is inconvenient. Meanwhile, the coastal areas of the upper Gulf of Thailand have only two ports that can accommodate cruise ships, namely the Bangkok Port and Laem Chabang Port, but there are limitations and challenges regarding inadequate facilities and services that do not meet the increasing number of tourists.

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