The Saudi monarchs have reportedly decided to drastically scale back their ambitious NEOM project, as reported by the US business magazine Bloomberg. Originally envisioned as a major part of Vision 2030, NEOM was supposed to be a showcase for the kingdom’s future economic potential. However, due to escalating costs and financial strain caused by budget negotiations for 2024, the royal family has decided to slow down the construction of “The Line” significantly.
The scaling back of the project has already had concrete consequences, with an international construction company withdrawing thousands of workers from the site. Despite this setback, the royal family is promising to complete other NEOM districts by 2030, such as the luxury tourism destination of Sindalah in the Red Sea. However, the delay in the NEOM project raises doubts about the kingdom’s ability to impress the world with major events like the 2029 Asian Winter Games, which NEOM was supposed to host.
One of the main reasons for this decision is the escalating cost of the project, which was originally estimated at $500 billion but has now ballooned to three times that amount within just a year of construction commencing. The majority of these funds come from Saudi sovereign wealth funds, specifically the Public Investment Fund, which has seen its cash reserves plummet to around $15 billion – the lowest level since