Saudi Arabia’s highly ambitious $500 billion Neom mega-city project, designed to revolutionize urban living, is facing significant delays, ballooning costs, and growing investor concerns. The futuristic development, intended to showcase Saudi Arabia’s forward-thinking vision, has encountered hurdles that threaten its completion.
A Grand Vision with Uncertain Progress
Launched in 2017 as part of Crown Prince Mohammed bin Salman's Vision 2030 plan, Neom was conceptualized as a state-of-the-art desert metropolis with innovations like a floating business district, a high-end ski resort, and The Line — a 170-kilometre-long linear city housed between two parallel skyscrapers taller than the Empire State Building. However, despite ambitious goals, progress has fallen short of expectations. According to a report by The Wall Street Journal, Neom has already consumed over $50 billion since its inception, yet many of its boldest ideas have struggled to materialize.
Sindalah: The Delayed Resort Project
The first phase of the project, known as Sindalah, was initially projected to cost $1.3 billion. However, the luxury resort's budget has now escalated to nearly $4 billion, marking a significant overrun. This phase was also years behind schedule, raising questions about the project’s financial stability and timeline. Adding to the concerns, Crown Prince Mohammed bin Salman, the project’s primary visionary, was notably absent from the recent Sindalah launch event. Shortly afterward, Neom’s CEO, Nadhmi al-Nasr, was replaced, further fueling speculation about internal issues.
Financial Manipulation and Management Concerns
A Wall Street Journal investigation revealed that internal audits discovered substantial financial manipulation within Neom’s leadership. Reports identified that some executives, allegedly aided by consulting firm McKinsey & Co., had manipulated financial projections to justify surging costs. The audit uncovered "deliberate manipulation" of figures by certain management members, raising concerns about accountability and transparency within the project.
Soaring Costs and Uncertain Timelines
A 2023 draft board presentation reportedly estimated that completing Neom by 2080 would require an astronomical $8.8 trillion — a sum exceeding 25 times Saudi Arabia’s annual budget. The first phase of Neom, expected to conclude by 2035, is projected to cost $370 billion. Despite such overwhelming financial demands, progress on The Line, the project’s centerpiece, has been significantly scaled back. Initially designed to span 16 km by 2030, this target was reduced to just 2.4 km — with only a half-mile section and a stadium expected to be ready by 2034. Engineering challenges have further complicated construction. The original plan for The Line featured towering 1,640-foot structures — requiring immense resources in glass and steel. As costs escalated, Neom officials proposed lowering the structure to 1,000 feet to reduce expenses. However, Crown Prince Mohammed bin Salman reportedly rejected this change, instructing the team to find cost-saving solutions elsewhere.
Trojena Ski Resort: Escalating Expenses
The futuristic ski resort Trojena, another key component of the Neom project, has faced similarly rising costs. A 2023 review uncovered an alarming $10 billion increase in expenses. To offset this, financial forecasts were reportedly inflated, with projected hotel room rates tripled or quadrupled to justify the investment.
Investor Hesitation and Economic Challenges
Saudi Arabia’s government has long claimed that Neom will attract substantial private investment. However, foreign direct investment (FDI) in the kingdom has remained significantly below targets. In 2023, Saudi Arabia attracted only $26 billion in foreign investment, far short of its ambitious 2030 goal of $100 billion per year. Investors remain cautious, citing the project's scale, regulatory complexities, and cost uncertainties as key concerns. The International Monetary Fund (IMF) has called on Saudi Arabia to improve transparency around Neom’s financial planning to address these doubts.
Future of Neom: Ambition vs Reality
While Saudi Arabia remains committed to completing Neom as a symbol of future urban living, the project’s escalating costs, construction delays, and internal management issues pose serious challenges. The dream of a futuristic desert city with floating districts, towering skyscrapers, and high-end resorts is now mired in financial uncertainty and engineering hurdles. As the project continues to evolve, the global community will be watching closely to see whether Neom can fulfill its promise of redefining modern urban landscapes — or become a costly symbol of unfulfilled ambition.
