Saudi Arabia’s NEOM City Project: A Visionary Dream or Financial Nightmare?

Saudi Arabia’s ambitious future city project, Neom City, appears to be struggling with funding.

The Daily Mail reported on the 23rd (local time) that Tariq Khattab, the Executive Director of Neom, recently held roadshows in Beijing, Shanghai, and Hong Kong, meeting potential investors. However, no significant contracts were announced during the Chinese roadshow. The Daily Mail pointed out that “doubts are being raised about the execution ability surrounding the Neom City project.”

Neom City is a core project of Vision 2030, a decarbonization national development project announced by Crown Prince Mohammed bin Salman, who holds absolute power in Saudi Arabia in 2017. The plan is to build a straight city, The Line, 105 miles (170km) long in the desert bordering the Red Sea, an advanced industrial complex, Oxagon, on the sea, and a tourist complex, Trojena, in the mountainous area. Through this, the Crown Prince predicted that the region’s population would reach 1 million by 2030 and 9 million by 2045.

However, the construction of Neom City is believed to be struggling with a lack of funds, as the project cost has skyrocketed beyond the initial estimate. The total project cost was estimated to be 500 billion dollars (about 685 trillion won), but it has since ballooned to a maximum of 1.5 trillion. According to Bloomberg, Saudi Arabian authorities expect only 1.5 miles (2.4km) of the 105-mile ‘The Line’ to be completed by 2030. Recently, the target of settling 1 million people in Neom City by 2030 has also been lowered to 300,000. The Daily Mail reported, “So far, Neom City has been financed by the Saudi Arabian Sovereign Wealth Fund, but foreign capital is desperately needed to maintain the construction speed.”

Meanwhile, Leonard Chan, chairman of the Hong Kong Innovation and Technology Development Association (HKITDA), said the reaction of Hong Kong investors who attended the Neom City roadshow was neutral. He told AFP, “I would visit for fun but wouldn’t live there. It’s like something out of SimCity.”