SAUDI ARABIA SCALES DOWN $1.5TN NEOM MEGA FLAGSHIP PROJECT OF CROWN PRINCE

Mon 08 April 2024:

Saudi Arabia has scaled back its medium-term ambitions for its futuristic megacity Neom, the flagship project of Crown Prince Mohammed bin Salman’s (MbS) Vision2030, according to Bloomberg, citing people familiar with the matter.

$1 TRILLION MIRRORED SKYSCRAPER PLANNED FOR NEOM IN SAUDI ARABIA

One source cited in the report revealed that the Saudi government’s initial plan aimed to accommodate 1.5 million residents within The Line, a vertical smart city intended to be housed within a pair of mirror-clad skyscrapers. However, current expectations suggest that the development will only accommodate fewer than 300,000 residents by the specified timeframe.

Authorities have consistently outlined plans for The Line’s phased construction, envisioning it to span a 170-kilometer expanse of desert coastline. However, in light of recent developments, officials now anticipate completing only 2.4 kilometres of the project by 2030. As a result, at least one contractor has initiated layoffs for a segment of its workforce assigned to the site, as evidenced by a document reviewed by Bloomberg.

KINGDOM OF SAUDI ARABIA PLANS TO BUILD WORLD’S TALLEST BUILDINGS IN MEGACITY NEOM

The slowdown in progress on The Line coincides with the Kingdom’s sovereign wealth fund, the Public Investment Fund (PIF) withholding approval for Neom’s budget for 2024. The report notes that the vast investment, totalling trillions of dollars, are beginning to raise concerns within the upper echelons of the Saudi government as it looks to realise its ambitious Vision 2030 program—an initiative aimed at diversifying the Kingdom’s economy. Already, officials have acknowledged that certain projects outlined in the project will be delayed beyond 2030.

In 2022, MbS said the first phase of Neom was expected to cost $320 billion (1.2 trillion riyals) by 2030. Half of that is expected to come from the PIF, which the de facto ruler chairs.

-MEMO

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