The estimated cost of Saudi Arabia's ambitious Neom megaproject has skyrocketed, escalating from its original $500 billion (£386 billion) to an eye-watering $8.8 trillion (£6.8 trillion). Neom, a sprawling urban development in Saudi Arabia's Tabuk province, is a key part of the country's strategy to shift from an oil-dependent economy to a vibrant, tourist-driven economy.
The mega project aims to revolutionise the region with groundbreaking ventures, including a floating industrial complex, a global trade hub, tourist resorts, and a linear city powered entirely by renewable energy sources. Saudi Arabia's Crown Prince Mohammed bin Salman has backed Neom as a groundbreaking solution to global urban challenges, including the pressing issues of livability and environmental sustainability.
According to a report, the funding estimates have risen following an internal audit conducted. The audit, which was presented to Neom's board last spring, reportedly uncovered overly optimistic assumptions that were used to justify the steep increase in costs.
Rayan Fayez, Neom's deputy CEO, confirmed that £40 billion has already been spent on the project, with over $50 billion allocated for building basic infrastructure. Fayez explained that Neom is not merely a real estate project but rather an economic transformation, aiming to diversify Saudi Arabia's economy by creating a new regional hub.
Despite the escalating costs, some aspects of the project have already seen significant adjustments. One of the most high-profile components, The Line, a futuristic, linear city that stretches 170 kilometres from Neom's mountainous terrain to the desert valleys and the Red Sea, has scaled back its projected population. The Saudi government initially aimed for 1.5 million residents to live in The Line by 2030. However, recent reports suggest this number will be significantly lower, with just 300,000 expected to inhabit the city by then. Long-term plans, however, still envision a population of nine million over the next century, according to Neom's Chief Development Officer.
While the soaring costs and revised population targets may raise concerns, the Neom project continues to be one of the most ambitious and heavily scrutinised ventures in the world, with the potential to reshape Saudi Arabia's economy and global position.
