According to reports similar to those from the US business magazine Bloomberg, the Saudi monarchs have reportedly scaled back the ambitious NEOM project. It is now projected that only 2.4 kilometers of the “Line” will be built by 2030, accommodating a maximum of 300,000 residents. However, these figures are still considered optimistic estimates.
One of the reasons for this scaling back is the increasing cost of the project. Initially estimated at $500 billion for the entire project, including a hydrogen power plant and a bridge over the Red Sea, the cost has now ballooned to three times that amount. The majority of the funding comes from the Saudi sovereign wealth funds, and with reserves dwindling to around $15 billion, budget negotiations for 2024 have likely played a part in the decision to slow down the project.
The delay in the NEOM project, a key part of the Vision 2030 program introduced by Crown Prince Mohammed bin Salman, could damage his reputation. The goal of Vision 2030 is to prepare the kingdom for a future without natural resources like oil and gas. While other parts of the program are progressing, the setback with NEOM could impact the overall success of the vision.
The consequences of the delay are already being felt, with an international construction company reportedly pulling thousands of workers off the project. Despite this setback, the royal family is promising to complete other NEOM districts by 2030, such as the luxury tourism destination on the island of Sindalah in the Red Sea.
Overall, the scaling back of the NEOM project raises questions about the kingdom’s ability to impress the world with major events like the Asian Winter Games in 2029. The future of the project and its impact on Saudi Arabia’s economic and tourism goals remain uncertain.