YNNews | Reports
The Kingdom of Saudi Arabia has officially announced a reduction in the size of the Neom tourism project known as “The Line” on the Red Sea.
– The city of Neom in Saudi Arabia was supposed to accommodate 1.5 million people by 2030, but this number has been reduced to 300,000, which is approximately one-fifth of the original population estimate.
– The entire length of the city was supposed to be 160 kilometers along the Red Sea coastline and was expected to take many years to complete. However, recent modifications indicate that the project’s length will not exceed 2.4 kilometers, which is less than 2% of the original project’s total length by 2030.
– The project’s estimated costs were planned to reach around $350 billion by 2030, with the total project costs amounting to $1.5 trillion. The Saudi sovereign wealth fund was expected to finance half of the costs, while the remaining half would be covered by foreign investments and loans. However, it seems that the liquidity in the sovereign wealth fund has decreased to $15 billion last year from assets of around $900 billion, and the state’s assets and revenues have declined in the past year, leading to a potential deficit of more than 4% due to the decrease in oil prices and production volume.
All these reasons have lowered the Kingdom’s ambitions and the pace of work in the Neom project, especially in the field of industry, as clean alternative energies were supposed to be the foundation of the project, such as solar energy and green hydrogen. The Neom project is reminiscent of massive Chinese projects when China was developing its entire housing, healthcare, tourism, and infrastructure in parallel. However, the main difference between China and the Kingdom is primarily that “the Kingdom cannot rely on domestic workforce, and most of the expertise comes from abroad.”
Source: MonteCarlo
