Saudi Arabia’s NEOM project to face challenges, says CE

Saudi Arabia’s $500 billion megacity project, NEOM, will have to navigate geographical and timeline challenges during implementation, London-based Capital Economics (CE) said in a recent report.

“For one thing, the first phase is not expected to be completed until at least 2025 so it will be some time before companies and people will be able to reside there,” the consultancy said.

Also, the project is located in currently uninhabited land and is likely to include parts of the Sinai Peninsula, where the Egyptian army has been fighting militant groups for many years, the report added.

Crown Prince Mohammad bin Salman announced the mega project, which will span three countries and cover approximately 26,500 square kilometer, at the Future Investment Initiative (FII) conference last week. The project is part of the country’s efforts to modernize and to diversify its economy away from oil.

CE said while implementing the megacity project, the Kingdom will have to ensure that NEOM does not divert attention from the economic reforms announced earlier under the Vision 2030 program.

The consultancy also cautioned against delays that could further set the project back, giving the example of King Abdullah Economic City (KAEC) that has “already been through four masterplans.”