Saudi Arabia Wants to Scale Back $1.5-Trillion Neom Urban Futuristic Project

Even for very wealthy Saudi Arabia, $320 billion is “too much.” That was the original cost of The Line, a futuristic zero-emission “linear” city 170 kilometers long. It was going to be built in the desert of Tabuk province, in northwestern Saudi Arabia, near the border with Jordan and across the Gulf of Aqaba from Egypt.

According to information from companies involved in Riyadh’s megagalactic plan and systematized by Bloomberg, the project “is being scaled back significantly due to cost and the infeasibility of some elements.” According to Bloomberg, the Saudi government expected the city “to be built and become operational by 2030, with 1.5 million people having settled there by then.” Now the US agency says that “projections have changed: by that date, Riyadh appears to expect to complete only 2.4 kilometers of the 170-kilometer project, which could accommodate fewer than 300,000 residents.”

Bloomberg recalled that “the original plan called for The Line city to be an integral part of the Neom project (a fusion of the prefix ‘neo,’ which means ‘new’ in Greek, with the first letter of ‘mustaqbal,’ which means ‘future’).” It calls for the construction of four even larger urban centers around The Line, one for each type of area it crosses: the Bay Area Marine Zone, the Desert Zone, the Mountain Zone, and the Valley Zone. The total cost of Neom will be at least $1.5 trillion.

Now it turns out, Bloomberg writes, that “construction has been slow and delayed, both because of the objective difficulty of implementing such ambitious projects and because of the involvement of foreign investors in a plan that is unclear whether it will actually meet expectations.” As for “material difficulties,” according to those interviewed by Bloomberg, “officials complain of a lack of technology and highly-skilled workers to keep up with the expected pace.”

Finally, the financial difficulties reflect the position of the Saudi sovereign fund Public Investment Fund (PIF), which manages all revenues generated from exports. The mutual fund, valued at $700 billion, is the “main tool” available to Crown Prince Mohammed bin Salman to implement his growth and economic development plan for Saudi Arabia, which would like to diversify its economy and free itself as soon as possible from dependence on oil, in order to guarantee its increasingly important role in the technology, health, and tourism sectors. The Saudi sovereign fund, which owns and is financing much of the Neom project, seems to doubt the project’s real feasibility and cost. According to Bloomberg, which reached out to Riyadh authorities for comment but was unsuccessful, “the fund is asking for the entire project to be scaled back from its original cost, which totaled $320 billion.”