Saudi Arabia Continues Its Ambitious Construction Projects, Including the Neom Project, a Region Built from Scratch the Size of Massachusetts Featuring Futuristic Architecture, a Ski Resort in the Desert, and a Host of Other Spectacular Endeavors. The Flagship of This Development, "The Line," Is a Pair of Skyscrapers Longer than the Empire State Building, Planned to Span a Stretch of 105 Miles and House Nine Million People. Due to Cost Considerations, Saudi Arabia has Now Reduced the First Phase of "The Line" to Approximately 1.5 Miles by 2030, Rather than the Originally Intended Roughly 10 Miles.
The construction of this stretch alone is internally estimated to be over $100 billion, highlighting that the cost per square foot is more than double that of other skyscrapers in the Middle East. The complete construction of "The Line" could actually cost well over $2 trillion, according to Neom employees. This makes it unlikely that Neom will attract significant private investments to finance further phases of "The Line."
The Enormous Expenditures Saudi Arabia has Budgeted for Neom are Ambitious and Could Cost the Country More Than it Can Afford. With an Official Cost Estimate of 500 Billion Dollars, the Price is 50% Higher Than the Country's Entire Federal Budget for the Year and More Than Half the Value of its Sovereign Wealth Fund.
Mohammed bin Salman, the Crown Prince and de facto ruler of Saudi Arabia, sees Neom as the ultimate symbol of his plans to transform the Saudi economy, reduce dependence on oil revenues, and act as a magnet for money and talents from around the world. However, he risks investing a major portion of the country's wealth into an unprecedented urban development experiment that may prove too difficult to deliver.
"Mohammed bin Salman is taking a gamble here," said Madawi al-Rasheed, a visiting scholar at the London School of Economics. "Spending so much money should, in theory, produce a noticeable boost in the Saudi Arabian economy," she added, but noted that so far a lot of money has been spent on foreign consultants and architects.
The challenges are enormous. More than 100,000 additional construction workers need to be accommodated in a barren corner of the vast desert of the kingdom, a two-hour drive from the nearest major city. The demand for steel, exterior glass, and other materials by Neom is so great that it could drive up global prices and be difficult to obtain.
