The ambitious NEOM project, which was once a key part of Saudi Arabia’s Vision 2030 program, is facing significant delays and cost overruns. According to reports from the US business magazine Bloomberg, only 2.4 kilometers of the “Line” will be built by 2030, accommodating a maximum of 300,000 residents. However, these figures are still considered optimistic estimates.
One of the main reasons for this scaling back is the increasing cost of the project. Initially estimated at $500 billion for the entire project, including a hydrogen power plant and a bridge over the Red Sea, the cost has now ballooned to three times that amount. The majority of the funding comes from the Saudi sovereign wealth funds, and with reserves dwindling to around $15 billion, budget negotiations for 2024 have likely played a part in the decision to slow down the project.
The delay in completing NEOM could have significant consequences for Crown Prince Mohammed bin Salman’s reputation. The goal of Vision 2030 is to prepare Saudi Arabia for a future without natural resources like oil and gas. While other parts of the program are progressing, a setback with NEOM could impact its overall success.
The consequences of this delay are already being felt as an international construction company has reportedly pulled thousands of workers off the project due to concerns about its viability and profitability. Despite this setback, however, the royal family remains committed to completing other NEOM districts by 2030 such as luxury tourism destination on island Sindalah in Red Sea as well as several other real estate projects across different cities in Saudi Arabia .
Overall, while it remains uncertain what impact this scaling back will have on Saudi Arabia’s economic and tourism goals in terms of major events like Asian Winter Games scheduled for 2029 or even on Crown Prince Mohammed bin Salman’s reputation it highlights that ambitious plans can sometimes face challenges that require adjustments and reevaluations before they become reality
