Saudi Arabia significantly scales back Neom

It was supposed to be Saudi Arabia's ultimate prestige project, initiated by Crown Prince Mohammed bin Salman himself: the Neom infrastructure project in the northwest of the country. After a series of disputes over missed deadlines and budget overruns, the undertaking is to be significantly scaled down.

Shortly before the end of a comprehensive review, Mohammed bin Salman concluded that the project should be much smaller, reports the British business daily Financial Times (paywall), citing insiders. The results of the review are expected in the coming months.

A major reason for the changes is the country's financial situation: a lot of money has been spent for years. However, the price of oil, the country's main source of income, is comparatively low. In addition, Saudi Arabia will host the Expo in 2030 and the Football World Cup in 2034, which means further investments.

Megaproject in the Desert

Neom is part of Saudi Vision 2030, a concept for restructuring the economy to become independent of oil. The infrastructure project is to be built in the northwest of the country, in an area about the size of Belgium. This includes individual projects such as the luxury holiday island Sindalah, inaugurated in 2024, the ski resort Trojena in the mountains, and the city Oxagon, which is to be built half on land and half on floating pontoons.

The most important sub-project of Neom is The Line, a city over 170 kilometers long, 200 meters wide, and 500 meters high, which was supposed to integrate a deep-water port for cruise ships and a high-altitude football stadium.

The megaproject, heavily criticized, is considered a failure in its current form and is to be significantly scaled down. According to bin Salman's new plans, data centers for artificial intelligence (AI) are to be built there. According to Neom, the country wants to "establish itself as a global hub for data and AI" and therefore attract investors and partners in this rapidly growing field.

Water and Clean Electricity

According to Neom, The Line is well-suited as a location for data centers: they need electricity and water for cooling. The city was to be built on the Gulf of Aqaba. Thus, there is plenty of water. In addition, according to Neom, inexpensive energy from renewable sources is available in large quantities – The Line was to be powered entirely by clean energy.

But not only The Line is being scaled down: Trojena, which is being built in the mountains in the hinterland, is also to be smaller than originally planned. In addition, the government has announced that the 2029 Asian Winter Games will not take place in Trojena as planned.

According to the official narrative, the Neom project has not failed: the changes show that the government and the system are capable of adapting goals, one of the insiders told the Financial Times. Neom itself told the newspaper that care is taken to coordinate and prioritize initiatives "so that they align with national goals and create long-term value."

(wpl)