The Dream Delayed: The NEOM Project’s Scaling Back and Its Implications for Saudi Arabia’s Future

The ambitious NEOM project, a key component of Crown Prince Mohammed bin Salman’s Vision 2030 program, has been scaled back according to reports. Initially projected to be completed by 2030, only 2.4 kilometers of “The Line” will now be built, accommodating a maximum of 300,000 residents. However, these figures are still considered optimistic estimates.

The reason for this scaling back is the increasing cost of the project. Originally 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 Saudi sovereign wealth funds, with reserves dwindling to around $15 billion. Budget negotiations for 2024 may have played a part in the decision to slow down the project.

The delay in the NEOM project could damage Crown Prince Mohammed bin Salman’s reputation as it is a key part of his vision for preparing Saudi Arabia for a future without natural resources like oil and gas. While other parts of the program are progressing, setbacks with NEOM could impact its overall success.

The consequences of the delay are already being felt as an international construction company has reportedly pulled thousands of workers off the project. Despite this setback, the royal family is promising to complete other NEOM districts by 2030 such as luxury tourism destination on Sindalah island in Red Sea which could help mitigate some negative effects on economic and tourism goals.

Overall, this scaling back raises questions about Saudi Arabia’s ability to impress the world with major events like Asian Winter Games in 2029 and its impact on their economic and tourism goals remain uncertain.