Saudi Arabia has scaled back on its plans to develop desert megapolis Neom. Neom is the biggest project undertaken by Crown Prince Mohammed bin Salman as he plans to diversify the Saudi Arabian economy that has been heavily reliant on oil.
According to a report by news agency Bloomberg, the Saudi Arabian government hoped that Neom would house 1.5 million residents living in The Line. The Line is a futuristic city which will be situated between a pair of mirror-clad skyscrapers. However, officials believe that it will house fewer than 300,000 residents by that time.
The officials also said that they will be able to complete only 2.4 kilometres of the project by 2030 while speaking to Bloomberg on condition of anonymity. The proposed plan envisages the linear megacity to span across a 170-kilometer stretch of desert along the coast.
The Bloomberg report also said that one contractor has started to dismiss a portion of its workers it had employed on the site.
Crown Prince Mohammed aims to make Neom, a $1.5 trillion project along the Red Sea coast, a key feature in Saudi Arabia’s economic transformation. It will also serve as a testing ground for innovative technologies, including The Line, an ambitious urban development initiative. Neom’s vision encompasses various components such as an industrial city, ports, and tourism hubs. Additionally, it is scheduled to host the Asian Winter Games in 2029, featuring a mountain resort named Trojena.
Meanwhile, work is ongoing in several other projects and an island in the Red Sea is being turned into a luxury tourist destination known as Sindalah, which is due to open this year.
The report said the kingdom’s sovereign wealth fund has yet to approve Neom’s budget for 2024 which led to the reframing of the targets associated with The Line.
“(Longer period of time needed to) build factories, build even sufficient human resources. The delay or rather the extension of some projects will serve the economy,” Saudi Finance Minister Mohammed Al Jadaan was quoted as saying by Bloomberg earlier in December.
Analysts speaking to Al-Monitor also said that Saudi Arabia will continue to scale back its Vision 2030 commitments to help the domestic economy remain healthy.
According to official data, foreign direct investment (FDI) in Saudi Arabia saw a notable increase, with net inflows reaching 13.1 billion riyals ($3.49 billion) in the fourth quarter of 2023. This marked a 16% rise from the third quarter’s 11.4 billion riyals ($3.04 billion). However, analysts observed that the actual FDI fell short of the Saudi government’s initial expectations.
The sovereign wealth fund Public Investment Fund’s (PIF) cash reserves dropped to $15 billion as of September.
The news agency also said lower oil prices led to the revision of the targets by the Saudi Arabian government and important engagements like hosting the Expo 2030 trade fair and the FIFA World Cup in 2034 also led to steps that indicate that the Saudi government is scaling back on its plans for 2030.
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