The Ambitious Future of Saudi Arabia’s NEOM: Delays, Dwindling Funds and Critics’ Concerns

The ambitious NEOM project, a key component of Crown Prince Mohammed bin Salman’s Vision 2030, is facing significant delays. Initially estimated to be completed by 2030, the construction of only 2.4 kilometers of “The Line” is now projected to begin by 2035, with a maximum capacity of 300,000 residents. Despite this setback, the royal family remains committed to completing other districts of the project, such as the luxury tourism destination on Sindalah Island in the Red Sea.

One of the primary reasons for this delay is the escalating 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, it has now tripled in value to an estimated $1.5 trillion. The majority of funding comes from Saudi sovereign wealth funds, which are dwindling to around $15 billion due to falling oil prices and declining reserves. Budget negotiations for 2024 likely played a role in slowing down the project’s progress.

The consequences of this delay are already being felt as an international construction company has reportedly pulled thousands of workers off the project site. Despite this setback, Prince Mohammed remains optimistic about the future success of Vision 2030 and its impact on Saudi Arabia’s economic and tourism goals. However, critics argue that his ambitious plans may not be sustainable without significant financial support from foreign investors or a shift away from oil-based economies towards more diversified sources of income.