The Saudi Arabian government is expected to slow down the development of the Neom City project, a key initiative of Crown Prince Mohammed bin Salman. This has diminished expectations for a construction boom in our industry.
Bloomberg reported on the 8th, citing sources, “Saudi Arabia has scaled back the midterm goals for Neom City, the largest project in Mohammed bin Salman’s plan to diversify the economy away from oil dependence.”
Initially, Saudi Arabia projected the population of the hyper-connected linear smart city The Line to reach 1.5 million by 2030, but recent estimates have been lowered to below 300,000.
The Line project involves creating a 170 km long hyper-connected community belt. The surface will be developed as an eco-friendly space for pedestrians, with underground transportation infrastructure like railways and roads. With the reduction in target figures, only 2.4 km of the total 170 km is expected to be completed by 2030, which may delay further construction orders.
Samsung C&T and Hyundai Engineering & Construction are working on tunnel construction for a high-speed freight rail service spanning 28 km.
Neom City is a futuristic city project being built in the desert near the Red Sea in the northwest of Saudi Arabia. It is a central part of Mohammed bin Salman’s Vision 2030. The total area is 26,500 square kilometers, which is 44 times the size of Seoul, and the project cost is $500 billion.
Meanwhile, as Saudi Arabia pushes forward with mega-projects like Neom City, it has been shown that the country’s cash reserves are rapidly decreasing. As of September last year, the Public Investment Fund (PIF) of Saudi Arabia’s sovereign wealth fund had $15 billion in cash, a 75% decrease from the year before. The PIF, the world’s sixth-largest sovereign wealth fund with $600 billion in assets under management, is a key resource for the Vision 2030 reforms.
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