The Crown Prince of Saudi Arabia's ambitious vision of a futuristic, carbon-neutral city in the desert has encountered a major setback. The Neom project, once hailed as an urban utopia, has been forced to halt work on its centerpiece, The Line, until at least 2030, according to recent reports.
The Line's Suspension
The Line, a 170-kilometer-long, 500-meter-high smart city designed to house 9 million residents, has been at the heart of the Neom project. However, leaked internal documents cited by The Wall Street Journal previously revealed that projected costs had skyrocketed to an astounding $8.8 trillion by 2080. Now, the state-run Neom company has suspended all construction on The Line. The international news platform Semafor reports that the kingdom's sovereign wealth fund has redirected funds toward critical infrastructure such as ports and AI data centers, amid the ongoing Iran war and global energy transition.
Impact on Other Projects
The cost-cutting measures have affected other ventures tied to Crown Prince Mohammed bin Salman's vision. Adelaide's LIV Golf tour, which had received a $5 billion investment, has seen its funding cut. Neom Stadium, a 46,000-seat venue intended for the 2034 FIFA World Cup, faces an uncertain future. The $1.6 billion Neom Industrial City Connector high-speed rail link has had its contract terminated. The Trojena mountain resort, an artificial snow field set to host the 2029 Asian Winter Games, has also halted work.
Market Forces and Strategic Shifts
Semafor, citing sources familiar with the matter, indicates that Neom funding is now limited to its most productive components. This includes $3 billion allocated to the Oxagon industrial port city on the Red Sea. The strategic shift is driven by the fact that most of Saudi Arabia's ports are in the Persian Gulf, which remains cut off due to the US/Israeli war with Iran. The crown prince's lavish spending has become unsustainable, as foreign investment has fallen short and expenditure has soared.
Despite the Iran war driving crude oil returns to a three-year high, with oil revenues reaching $24.7 billion after the first month, the nation's economy is strained by supply chain disruptions. Bloomberg Economics analyst Ziad Daoud notes that each month of fighting costs Saudi Arabia about 1.5% of GDP in extra spending, necessitating savings.
Redesign and Reduced Ambitions
Work began last year on redesigning The Line's twin linear skyscrapers to cut costs. The project was originally envisioned as an ultra-green, energy-efficient, AI-connected structure with an advanced internal electric shuttle system. However, the future of this redesign remains unknown. Neom has also scaled down its population targets: by 2030, the goal is now up to 100,000 residents, down from earlier forecasts of 1.5 million and then 300,000 two years ago.
Other projects, such as The Cube (Mukaab), a $50 billion skyscraper in Riyadh, were suspended in January. The 57-kilometer high-speed rail interconnector between The Line and Oxagon ended this week at about 20% completion. The crown prince's dream of a desert city appears to be crumbling under financial and geopolitical pressures.
