Saudi Arabia's NEOM Faces Reality Check Amid Rising Costs

Saudi Arabia has adjusted its NEOM project plans to focus on essential elements like sporting venues due to rising costs. The project, central to Vision 2030, aims to host events like the 2034 World Cup final. Project deadlines are tight, and changes in leadership may affect progress.

Saudi Arabia has adjusted its grand plans for the NEOM gigaproject, prioritizing the completion of venues essential for hosting global sporting events amid escalating costs, as reported by three sources to Reuters. This strategic shift follows the unexpected departure of NEOM's longstanding CEO, Nadhmi al-Nasr.

The NEOM project, a cornerstone of Crown Prince Mohammed bin Salman's Vision 2030, aims to diversify the kingdom's economy away from oil reliance. Originally announced in 2017, NEOM is a vast Red Sea development projected to house nearly nine million people. However, financial limitations have led to a reassessment of priorities.

Among the priorities is completing The Line, a futuristic urban design meant for renewable energy, which will feature a stadium set to host the 2034 World Cup final. Additionally, the Trojena mountain resort is being fast-tracked to host the 2029 Asian Winter Games. While changes in management may pose challenges, experts suggest the narrowed focus might appeal to investors.

(With inputs from agencies.)