Saudi Arabia’s ‘city of the future’ project has lost its key leader

Ayman Al-Mudafir was appointed interim director general, says in a message published on Neom’s page on the social network The reorganization may mean that attention has shifted to other investment projects.

Neom, announced in 2017, was intended to symbolize Saudi Arabia’s economic and social transformation. Crown Prince Mohammed bin Salman wanted to transform a strip of desert into a futuristic city of 1 million people by 2030, eventually home to 9 million people.

Despite numerous attempts, Neom has failed to attract foreign investors. The Crown Prince estimated the project at $500 billion. Former Neom senior managers, in a conversation with the WSJ, noted that the construction of the several-mile-long Line skyscraper alone would cost more than $2 trillion. Saudi Arabia does not have that financing.

The construction of Neom is already accompanied by billing, delays and cost overruns. Local authorities stated that the country does not have the money to finance all the planned projects. Over the past three years, the first phase of the Line has been reduced from 16 km to 2.5 km, but it will still become the largest building in the world.

Saudi Arabia’s Public Investment Fund manages about $1 trillion in assets, but most of it is in investments that are difficult to sell quickly. These include a 16% stake in oil giant Aramco, securities in telecommunications company STC Group and numerous investments in private equity funds. Saudi officials in an interview with the WSJ said authorities decided to cancel some investment projects and postpone others to a later date.