Neom’s flagship linear city in the desert is to be scaled back from 170km long to just 2.4km in the medium term, as reports indicate a slowdown in contract awards on Saudi Arabia’s five official gigaprojects.
The Line is the biggest development within Saudi crown prince Mohammed bin Salman’s ambitious Neom project in Saudi Arabia’s Tabuk province.
It is being funded by US$500bn (£400bn) from the Public Investment Fund of the Kingdom of Saudi Arabia – a sovereign wealth fund. The total cost of the project has been reported as US$1tn to US$1.5tn (£790bn to £1.19tn).
The Line was planned to be a 170km long futuristic city built between two 500m high mirrored facades. It was expected to house 1.5M residents by 2030.
However, Bloomberg has reported that just 2.4km of the project is now expected to be completed by 2030, at which point it will house fewer than 300,000 residents.
Officials told the media organisation that the development will be built in stages – and that the project is still expected to eventually cover a 170km stretch of desert.
Recent updates by project promoter Neom appear to show that foundation work is progressing on parts of the Line. In a video, Neom claimed that the “world’s biggest earthworks operation” was underway on the Line, with contractors said to be moving 2M.m3 of earth per week.
But the latest revelation that the Line will be scaled back in the medium term may cause problems for contractors who have already been brought to work on the development.
At least one contractor has started to dismiss some of the workers it employs on the site, according to Bloomberg.
It comes after geotechnical specialist contractor Keller Group hinted at possible problems on the Line in a trading update in October 2023. In the update it said that piling work on the Line had been delayed due to the “evolution of the design”, and that it was “taking steps to redeploy resources in the short term”.
Keller has been carrying out foundation work on the Neom desert scheme following the signing of an umbrella framework agreement in summer 2022. It completed its first works order on the Line in the first quarter of 2023 which was worth £40M.
In a more recent trading update in January this year, it said: “At Neom, we continue to take a measured and disciplined approach to the opportunities provided by the project.
“Whilst we remain in constructive discussions with the client in respect of future work on the Line, we do not have a current works order and have redeployed resources in the short term.”
The business had previously said that it expected to be awarded a second works order in the second half of 2023, although it also noted that the phasing of the Neom project was “subject to variation”.
Keller has turned its attention to delivering a US$80M (£64M) work package on Trojena – Neom’s winter resort development – and is preparing to mobilise to that site. It expects to complete work on Trojena by the end of 2024.
The scaled back plans for the Line coincide with a decline in contract awards for Saudi Arabia’s five official “gigaprojects” – or “once in a generation” infrastructure projects – in March this year.
Middle East business magazine Meed reported that the schemes – which it listed as the Diriyah, Neom, Qiddiya, Red Sea and Roshn projects – added just US$271M (£217M) in March to the US$57bn (£46bn) total value of contracts they have awarded since their launch.
Meed said that it was too early to say whether the slowdown in contract awards on the five projects was part of a longer-lasting trend, or due to fluctuations in the construction industry.
However, Bloomberg noted that the scaled back plans for the Line come as Saudi Arabia’s sovereign wealth fund has yet to approve Neom’s budget for 2024. According to the news organisation, this may indicate that the scale of investment in Neom is starting to cause concern among officials in the Saudi government.