Despite setbacks, NEOM drives futuristic vision

NEOM's ambitious vision to create a city of the future is challenged by rising costs, shifted timelines and strategic reviews. While setbacks hamper work on The Line, the $500-billion Saudi megacity is fast-tracking construction activity on its mountain destination Trojena and Oxagon.

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SAUDI ARABIA'S ambitious NEOM megacity project is facing considerable challenges and a strategic reset, as uneven development and delays affect key components, including its centerpiece, The Line, and the mountain resort complex Trojena, despite substantial contract awards, according to recent reports and financial disclosures.

The Public Investment Fund (PIF), Saudi Arabia's nearly $1 trillion sovereign wealth fund, has recorded an $8 billion writedown on some of its high-profile gigaprojects, including NEOM, signalling cost overruns and implementation challenges, say reports. PIF valued gigaprojects on its books at SR211 billion ($56.24 billion) as of end-2024, a 12 per cent drop from the previous year. These setbacks are attributed to the projects’ scale and complexity, as well as constraints from less buoyant oil prices, according to Moody’s Investors Service.

The visionary megaproject currently under development in the northwest of Saudi Arabia, as part of the Vision 2030 plan to diversify the kingdom's economy, focuses on sustainability, technology, and exceptional livability powered entirely by renewable energy. The project is an umbrella for several distinct regional components:

The Line is envisioned as a 170-km-long, 500-m-high linear smart city with mirrored façades, designed to be car-free and carbon-neutral;

Oxagon is planned as the world’s largest floating structure, serving as an advanced, clean industrial hub and global trade/logistics centre on the Red Sea;

Trojena is the mountain destination at altitudes up to 2,600 m, set to offer year-round adventure sports and a ski resort. It is expected to host the 2029 Asian Winter Games;

Sindalah is a luxury island resort positioned as NEOM's first destination to open to tourists, catering to the yachting community; and