The Saudi Arabian government will significantly cut the budget for the Neom project, Crown Prince Mohammed bin Salman’s key initiative. As a result, other mega projects are expected to slow down.
Bloomberg reported on Thursday that a government committee led by Crown Prince bin Salman has almost completed a full review of the mega projects, including Neom.
According to sources, Saudi Arabia is expected to cut this year’s Neom budget by 20%.
Furthermore, an airline establishment in Neom is also reportedly on hold. Neom is a futuristic city project built in the desert near the Red Sea in northwestern Saudi Arabia. It is a key part of “Saudi Vision 2030,” and its total area is 10,232 square miles.
The cost of the Neom project has escalated significantly from its initial $500 billion budget to a staggering $1.5 trillion, with estimates suggesting it could ultimately exceed $2 trillion. The centerpiece of Neom is “The Line,” an innovative super-connected community that stretches 170 kilometers (105 miles). This immense linear city will be 200 meters (656 feet) wide and 500 meters (1640 feet) tall, covering 170 kilometers. It will be powered by environmentally friendly energy sources, including hydrogen and solar power. Notably, the city will be free of roads and cars; residents will commute using high-speed trains and air taxis.
Saudi Arabia originally planned to build The Line with a population of 1.5 million by 2030, but the recent forecast has been lowered to less than 300,000. By 2030, only 2.4 kilometers (1.5 miles) of the total 170-kilometer stretch will be completed.
Saudi Arabia has also scaled down the “Qiddiya Coast’ project,” a tourism project developed in the Red Sea port city of Jeddah. The initial cost of this project was $50 billion. Qiddiya is a desert area with quarries about 40 kilometers (25 miles) from the Saudi capital, Riyadh. The Saudi government planned to build a new city with a complex that included a theme park, safari, motorsports, water park, shopping malls, and houses.
Saudi Arabia’s decision to downscale mega projects is due to financial issues. The Saudi government has been running a deficit since the end of 2022; a deficit of $21 billion is expected this year. Saudi Arabia sold $11.2 billion of Aramco shares early last month to allocate funds.
Most Commented