Neom: Saudi’s $8.8 Trillion Dream Project Or Financial Nightmare?

Saudi Arabia’s ambitious Neom project—a futuristic, carbon-neutral, 105-mile-long linear city envisioned by Crown Prince Mohammed bin Salman (MBS)—is reportedly spiraling into financial disaster.

The futuristic dream includes a massive all-inclusive resort on the coast, a second ski resort in the mountains, and an up to 106 miles-long pair of 1,600-foot skyscrapers called The Line. The country has already spent $50 billion with little progress, with ongoing delays and labour shortages threatening to balloon the project cost to a whopping $8.8 trillion -- more than 25 times Saudi Arabia’s annual budget, as per a Wall Street Journal report.

An internal audit presented to Neom’s board last summer suggests that construction could stretch on for another 55 years—a staggering timeline that far exceeds initial projections. If realised, the cost would be more than 25 times Saudi Arabia’s annual budget. The project faces immense challenges, including labour shortages, infrastructure gaps, and unreliable power supply.

The Line, in particular, has shot up in costs significantly. The original plan was to have the skyscraper stretch 100 miles through the desert, but that plan is looking increasingly unlikely. Even schemes for a first piece of the skyscraper were revised from ten miles to just 1.5 miles within the next decade.

Recommendations to reduce the planned height of the pair of skyscrapers to around 1,000 feet from 1,600 feet to save costs were vehemently opposed by crown prince bin Salman himself.

Critics argue that MBS miscalculated the feasibility of his vision, drawing comparisons to Napoleon’s missteps before Waterloo. What was meant to be a revolutionary urban blueprint now appears more like an unsustainable financial burden.

However, McKinsey & Company seems to be benefiting. The consulting giant reportedly earns over $130 million annually for its work on Neom, despite controversy over its dual role in both planning and validating the project’s financial projections. McKinsey maintains that it has “strict protocols to prevent conflicts of interest.”