Saudi Arabia puts development plans on hold amid economic revamp
2 Min Read
Neom is anticipated to be provided 20% less than its targeted budget for this year, according to sources.
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Mirror-encased skyscrapers in the area known collectively as The Line, at the planned Neom city in Saudi Arabia, unveiled by Crown Prince Mohammed bin Salman on July 25, 2022. (Neom.com)
Saudi Arabia may put plans on hold and slash billions of dollars on some of its biggest development projects amid enhancements in the scale of its economic makeover.
According to Bloomberg, a government committee by Saudi ruler, Crown Prince Mohammed Bin Salman, may soon wrap up a review of mega projects, such as the desert development known as Neom, citing people familiar with the matter.
Amid its development on the Red Sea coast, Neom is anticipated to be provided 20% less than its targeted budget for this year, as per the sources, who added that even plans to launch a new airline for the area have been put on hold for now.
Other plans put on the backburner include the unannounced tourist and entertainment project Qiddiya Coast in Jeddah, which had an intended budget of $50 billion, according to the sources.
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Since 2017, Saudi Arabia has been working on developing Neom in a desert area along the Red Sea. The country has committed at least $500 billion to this project but continues to actively seek additional investments to support its development.
A significant issue in the project is the reduced estimates for the number of people expected to settle in Neom, particularly in The Line, a key component of the project. This could impact the city's viability and economic sustainability.
According to sources within the Saudi government, as cited by Bloomberg back in April this year, The Line was originally intended to accommodate 1.5 million people by 2030. However, it has since been scaled down, with plans now aiming for a population of 300,000 residents.
Additionally, the length of the innovative linear city has been reduced from an initial 170km to a mere 2.4km, amid reports that workers at the site in northwestern Saudi Arabia are being laid off.
Neom's individual projects will need around $1.5 trillion for their completion, as the Kingdom hopes to build a mountain ski resort and an artificial lake, as well as an industrial development that floats on the Red Sea.
