Saudi Arabia has adjusted its medium-term vision for the ambitious desert development of Neom, a cornerstone project in Crown Prince Mohammed bin Salman’s strategy to diversify the oil-dependent economy, as per sources familiar with the matter.
Initially aiming for 1.5 million residents in The Line by 2030, a futuristic city envisaged within a pair of mirror-clad skyscrapers, officials now anticipate accommodating fewer than 300,000 residents by that time, according to insider insights.
Previously outlined to span a 170-kilometer stretch of desert along the coast, The Line’s latest projections indicate a scaled-back completion of just 2.4 kilometers by 2030, a source revealed on condition of anonymity.
Consequently, one contractor has begun downsizing its workforce on the site, as documented by Bloomberg.
While representatives for Neom and the kingdom’s Public Investment Fund, the project’s primary financier and owner, declined to comment, Crown Prince Mohammed’s vision for Neom remains integral to Saudi Arabia’s economic transformation plans.
Designed as a $1.5 trillion development on the Red Sea coast, Neom aims to be an economic and technological showcase, featuring industrial zones, ports, tourism hubs, and The Line, alongside hosting the 2029 Asian Winter Games at the Trojena mountain resort.
Despite the adjustments to The Line, work continues on other facets of the Neom project, such as the Sindalah luxury tourist destination set to open this year.
These revisions coincide with delays in the approval of Neom’s 2024 budget by the kingdom’s sovereign wealth fund, underscoring financial concerns amidst the monumental investment required for Vision 2030, Saudi Arabia’s overarching economic diversification initiative.
Acknowledging the need for a longer timeframe to realize objectives, Finance Minister Mohammed Al Jadaan emphasized the importance of building infrastructure and human resources, hinting at potential project extensions.
Crown Prince Mohammed’s ambitious plans for The Line, conceptualized as a sprawling metropolis encased in mirrored structures, have garnered global attention. However, the project’s primary achievement thus far has been the development of renewable energy infrastructure for green hydrogen production.
As the Public Investment Fund explores avenues to raise capital, including debt sales and equity offerings, its cash reserves have dwindled to $15 billion as of September 2023, the lowest level since 2020.
In 2022, Crown Prince Mohammed outlined the first phase of Neom, expected to cost 1.2 trillion riyals ($320 billion) by 2030, with half of the funding anticipated from the Public Investment Fund under his leadership.
