The big problem for Saudi Arabia’s futuristic city? The country doesn't have enough money
Subscribe to enjoy similar stories. The giant futuristic planned city of Neom is proving a headache for Saudi Arabia. Costs are up, schedules are delayed and in recent days the world’s largest construction project replaced its chief executive of six years.
Looming in the background: The world’s largest oil exporter is strapped for cash. Despite its reputation for deep pockets, Saudi Arabia can’t afford the laundry list of glitzy megaprojects and economic initiatives tied to Vision 2030, Crown Prince Mohammed bin Salman’s plan to pivot the economy away from oil. The board of Neom didn’t provide a reason why it abruptly replaced its CEO Nadhmi al-Nasr over the weekend.
But former Neom employees said Nasr frequently clashed with Neom’s owner and funder, the Public Investment Fund, over swelling budgets. Billions of dollars have been spent preparing the desert sands for the remote Megalopolis. Representatives of the Public Investment Fund and Neom didn’t respond to a request for comment.
Critics inside of Neom say money has been wasted on unnecessary groundworks. At the Line—a pair of horizontal skyscrapers to run longer than the distance from New York to Philadelphia—contractors dug out 60 miles of sand. That is despite the first phase of the project only running 10 miles, which was later downsized to 1.5 miles.
Neom isn’t alone. Projects around the kingdom are poised for a similar dynamic, with builders facing massive funding needs as they transition from low-cost early work to building out the bulk of the projects. The crown prince announced Vision 2030 in 2016 as a sprint to reshape Saudi Arabia’s economy in 14 years.
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