Economy Minister Dismisses Reports on NEOM Scaling Back as All Projects Move Full Steam Ahead

Saudi Arabia’s economy minister has dismissed reports suggesting that plans for its $1.5 trillion NEOM megaproject are being scaled back due to financial concerns. Faisal Al Ibrahim, speaking at the World Economic Forum in Riyadh this week, told CNBC: “All projects are moving full steam ahead”.
The Line project – a planned glass-walled city set for completion by 2030 – was reportedly reduced from its original plan to cover a length of just 1.5 miles as opposed to the previous estimate of around 105 miles, with the number of residents slashed too. The Bloomberg report suggested that this downsizing could be due to concerns over finances for NEOM which is part of Saudi Arabia’s broader Vision 2030 initiative aimed at diversifying its economy away from oil dependency.
However Al Ibrahim clarified: “All projects are moving full steam ahead… We see feedback from the market, we see more interest from investors and we’ll always prioritize to where we can optimize for optimal economic impact”. He added that decisions would be made in line with what is best economically while avoiding overheating risks.
The NEOM project was initially conceived as a futuristic development on the Red Sea coast, aimed at attracting businesses and talent through high-tech infrastructure projects including robotic automation factories, research centres for renewable energy storage technology and an artificial intelligence hub to support emerging tech companies.
In April, reports emerged suggesting that private investors are already displaying heightened levels of interest in these various subdivisions; from residential sectors intended primarily for home-ownership rather than as investments – thus keeping down real estate prices – through the medical city and smart ports complexes to research facilities with high environmental standards.
According to Al Ibrahim, despite financial uncertainties that have affected many international investors in recent years due to economic disruption caused by COVID-19 restrictions, NEOM is still attracting significant investment from foreign as well as local players keen on supporting the development of cutting edge tech infrastructure and services.
“These projects will be delivered to their scale and in a manner that suits the needs of these projects… Keep in mind that these sectors didn’t exist in the past – they are being built from scratch, so they require some investment,” Al Ibrahim told CNBC on Monday during his speech at WEF.
“And we’re seeing increased investor interest for all of these projects,” he added. “These projects will be delivered to their scale and in a manner that suits the needs of the project’s returns, while also avoiding overheating risks”.