Thailand's plan to build a canal along the Kra Isthmus would not spell doom for Malaysian ports even though business would be hit, Prime Minister Dr Mahathir Mohamad said today.

The Kra canal - which would allow vessels bound for the Pacific Ocean to bypass the Malacca Straits - has been discussed in Thailand for centuries without any firm conclusions being made on whether it is viable.

Prime Minister Thaksin Shinawatra revived the ambitious plan to dig a canal across Thailand to link the Indian Ocean with the Gulf of Thailand last year by offering to fund a preliminary study.

The plan was however set back by the Sept 11 terror attacks in the United States.

"If Thailand wants to build a canal across the Isthmus of Kra, that's their right within their territory and we will have to make adjustments," Mahathir told a news conference.

"There will be a reshaping of the economies because of this. We will have to find a way of benefiting from this."

Mahathir said construction of the canal would not mean the end for Malaysia even though its ports would be affected.

"I am sure even if you build the canal, it does not mean others will have to close shop. They built the Suez Canal (but) Cape Town is still there. When they built the Panama Canal, it did not mean South America becomes redundant," he added.

Public hearings

A previous study by Thailand before the 1997-1998 financial crisis estimated it would take 10 years and US$15.7 billion (RM60 billion) to dig the canal.

Thailand has said it would begin conducting public hearings if the project was found feasible. If not, the idea which was first raised some four centuries ago would be canned once and for all.

The plan has also met with opposition from local activists for security, economic and environmental reasons.