Saudi Arabia to Spend $16 Billion on Neom Megacity Project Cancellations
Saudi Arabia's government will spend approximately $16 billion over the next five years on contractor termination payments for cancelled portions of its Neom megacity project, according to reports. The massive project, envisioned by Crown Prince Mohammed bin Salman as part of Vision 2030 to diversify the economy away from oil, has faced significant scaling back after years of delays and cost overruns. The cancellation costs exceed what the government plans to spend on actual construction, highlighting the financial challenges of the ambitious development.
Saudi Arabia's Neom megacity project, a cornerstone of Crown Prince Mohammed bin Salman's Vision 2030 economic diversification strategy, is facing substantial financial penalties as the government scales back its ambitions. According to reports, the Saudi government has allocated 60 billion riyals ($16 billion) in its five-year budget specifically for contractor termination payments tied to cancelled project elements. The original vision included The Line, a 170-kilometre linear city built between two 2-kilometre-wide parallel structures, along with mountain ski resorts, coastal resorts, and industrial zones. After the Financial Times reported in January that the project would be significantly downsized, architectural experts criticized the original design as unrealistic from an urban planning perspective, despite being physically feasible. The Kingdom has already spent approximately $64 billion on Neom to date, with The Line alone originally forecast to cost $500 billion. The scaling back followed a strategic review initiated when Aiman Al-Mudaifer became chief executive of the Neom company.
What different sources said
- The IndependentLeft
Saudi government to spend $16 billion on cancelling parts of troubled Neom megacity project: report
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