Saudi Arabia: Neom management allegedly covered up high costs
The Neom settlement project with the band city The Line in Saudi Arabia is controversial. It threatens to become a financial disaster.
Artist's impression of The Line: Completion not until 2080?
(Image: Neom)
A mirrored city that stretches 170 kilometers through the desert: What is to become a symbol of Saudi Arabia's post-oil future could turn into an economic nightmare.
The Line is to be just 200 meters wide and 500 meters high, but 170 kilometers long. Nine million people are expected to live in an area of just 34 square kilometers. The project is highly controversial in various respects, partly because people have been forcibly relocated for it.
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In financial terms, Crown Prince Mohammed bin Salman's prestigious project appears to be highly problematic: the future monarch's "sci-fi-inspired dreams" have "collided with reality", reports the US daily Wall Street Journal: costs have risen immensely and work is behind schedule.
"A dance of mutual deception"
The reason for the problems is "a dance of mutual deception", writes the newspaper: the crown prince had "fantastic plans". The management staff, on the other hand, had kept problems and the real costs secret from him. This emerges from a 100-page report that was submitted to the Neom board a year ago and which the Wall Street Journal was able to view.
The review of the project revealed "evidence of deliberate manipulation" of the finances. These had been committed by members of the management who, for example, had included unrealistic assumptions in the business plan. According to the investigation report, they were supported by employees of the consulting firm McKinsey, which is working on the project.
A Neom spokeswoman accused the Wall Street Journal of misinterpreting the figures. A McKinsey spokesman told the newspaper that the consulting firm abides by international business rules and is not involved in any manipulation of financial reporting.
Neom includes several projects
The Neom project is part of Saudi Vision 2030, a concept for restructuring the economy in order to become independent of oil. It comprises several individual projects in the northwest of Saudi Arabia. These include the luxury holiday island of Sindalah, which was inaugurated last year but is not yet complete, Trojena, a ski resort in the mountains in the hinterland, the city of Oxagon, half of which is to be built on land and half on floating pontoons, and The Line.
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According to official information, The Line is scheduled for completion in 2045 and will cost 500 billion US dollars. The management now assumes that the entire Neom project will not be completed until 2080. The costs could add up to 8.8 trillion US dollars.
(wpl)
