According to a report by US business magazine Bloomberg, the Saudi monarchs have decided to drastically scale back their ambitious NEOM project. Originally estimated at $500 billion, the project has now ballooned to three times that amount within just a year of construction commencing. The decision was made due to the escalating cost of the project and financial strain caused by budget negotiations for 2024.
The majority of the funds for the NEOM project come from Saudi sovereign wealth funds, specifically the Public Investment Fund, which has seen its cash reserves plummet to around $15 billion – the lowest level since the start of the pandemic in 2020. This financial strain is likely due to budget negotiations for 2024, prompting the royal family to slow down the construction of “The Line” significantly. However, this delay could tarnish the reputation of Crown Prince Mohammed bin Salman, who is leading the Vision 2030 program aimed at diversifying the kingdom’s economy away from oil and gas.
NEOM was envisioned as a major part of Vision 2030, serving as a showcase for the kingdom’s future economic potential. The scaling back of the project has already had concrete consequences, with an international construction company withdrawing thousands of workers from the site. Despite this setback,