Saudi Arabia's Neom project faces shift in focus amid economic pressure

Saudi Arabia's ambitious Neom project, estimated to cost as much as $1.5 trillion, is one of the kingdom’s most high-profile ventures, aiming to transform the nation’s economy and living standards.

In the northwestern desert of Saudi Arabia, a vast construction site filled with cranes and pile drivers is surrounded by a newly built road. A pair of tracks slice through the site like deep wounds in the sand, forming the backbone of what planners envision as a high-speed rail system, Caliber.Az reports via foreign media.

This skeletal infrastructure marks the beginning of The Line, a multi-billion dollar, high-tech city that its designers claim will eventually accommodate 9 million people within two 106-mile-long glass skyscrapers, each rising over 1,600 feet.

The project, which is estimated to cost hundreds of billions, is just one of the many futuristic developments planned for Neom, a region conceived by Saudi Crown Prince Mohammed bin Salman. 

Neom is expected to attract millions of new residents to Saudi Arabia and revolutionize both living and technology within the kingdom. It is a central element of Vision 2030, a plan to reduce Saudi Arabia’s dependence on oil revenues and create new jobs and industries for the country’s growing young population. 

The cost of Neom has been estimated at up to $1.5 trillion. Since its announcement, Saudi Arabia's Public Investment Fund, the massive sovereign wealth fund managing $925 billion in assets, has invested billions in international ventures, attracting waves of foreign investors to the kingdom in search of capital. 

However, this year has seen a notable shift in spending strategy, with a clear focus on keeping investments within the country and reports suggesting cost-cutting measures on mega-projects like those in Neom. 

These adjustments come as Saudi Arabia's deficit grows and the outlook for oil demand, as well as global oil prices, remains low for an extended period.

By Naila Huseynova