Endless Crises: How Neom Turned into the Graveyard of MBS's Dreams

In a surprising announcement on November 11, 2024, Saudi Arabia revealed the departure of Nadhmi al-Nasr, the longtime CEO of NEOM, one of the world’s largest construction projects. 

Ayman al-Mudaifer has been appointed to lead the “ambitious initiative,” which has faced persistent challenges, including delays, cost overruns, and high staff turnover, marking a significant shift for “the flagship development.” This was according to people familiar with the decision and an internal Neom email announcing the change. 

The move comes amid growing skepticism about the Kingdom’s ambitious development plans, spearheaded by Crown Prince Mohammed bin Salman (MBS).

While no specific reasons were given for al-Nasr’s departure, it is being described as a “major change” at the helm of a project that remains a top priority for MBS.

Delays, cost overruns, and staff changes have long been among the challenges facing NEOM.

International reports, however, have pointed to even greater crises, casting doubt on the viability of the entire venture.

The Crown Prince has funneled an estimated $500 billion through the Saudi Public Investment Fund to launch the city and lay its foundations.

Located in the far northwest of Saudi Arabia, in the Tabuk region, NEOM is bordered by the Red Sea to the west, stretching 460 kilometers along the coast.

Shocking Admissions

In its report on the recent changes at the NEOM project, The Wall Street Journal (WSJ) revealed startling admissions from Saudi officials, who acknowledged that they lacked sufficient financial resources to fund all the mega-projects that were initially planned.

Some projects are currently being delayed while others are canceled, although no details have been disclosed.

Citing informed sources, WSJ reported that executives from the Public Investment Fund (PIF) are stepping in to take control of the NEOM project.

Saudi Arabia has scaled back lofty ambitions for its NEOM giga project to prioritize completing elements essential to hosting global sporting events over the next decade as rising costs weigh, three sources told Reuters a day after the sudden departure of the project's longtime CEO.

According to the agency, “Crown Prince Mohammed bin Salman has poured hundreds of billions of dollars into development projects through the kingdom's PIF sovereign wealth fund.”

“But the world's top oil exporter has had to rein in some of its ambitious plans over the past year as low oil prices and production continue to hit an economy still heavily reliant on hydrocarbon revenues.”

Reuters said reduced oil production has already taken a toll on the economy, which remains heavily reliant on oil and gas revenues.

“When the [NEOM] project was first pitched as an idea, costs were $500 billion. However, The Line [project for example] alone was going to cost over a trillion which was why it's been scaled back,” one consultant with knowledge of the matter told the Agency.

The Line project, a centerpiece of NEOM, involves hanging pathways, gardens, and a stadium and aims to run on 100% renewable energy.

Two additional sources said the changes led to the departure of hard-charging executive Nadhmi al-Nasr, who had been chief executive of the kingdom’s marquee development project since 2018. The decision was reportedly due to his inability to meet the core objectives envisioned by Crown Prince Mohammed bin Salman.

Another source with knowledge of the matter told Reuters that several NEOM officials closely associated with the ex-CEO might also soon leave the company.

Mass Departures

The challenges and setbacks facing NEOM are not new. In 2022, the project saw a wave of resignations.

Prominent departures included Andy Wirth, a hospitality executive; Norman Foster, a British architect; Sam Altman, former president of Y Combinator; Ernest Moniz, former U.S. Secretary of Energy; and Klaus Kleinfeld, former CEO of the American aluminum giant Alcoa.

MBS has consistently championed NEOM, often exaggerating its features. In 2017, he famously called the project “a civilisational leap for humanity.”

Launched in 2017, NEOM was promoted as a groundbreaking vision for the future. The Crown Prince claimed the city’s food would be grown on vertical walls or floating platforms, powered by the world’s largest eco-friendly energy generator. He even envisioned a snow-covered mountain created by artificial snow machines, driverless cars, and drone-operated aircraft.

The name “NEOM” is derived from the Greek word “neo,” meaning “new,” combined with the Arabic letter “meem” to signify “future,” translating to “new future.”

NEOM Illusion

“MBS: Despot in the Desert;” on July 28, 2022, The Economist published a revealing report by Journalist Nicholas Pelham, which delved deep into the ambitions and controversies surrounding Saudi Crown Prince Mohammed bin Salman.

After visiting the project, Pelham scrutinized NEOM, highlighting the Crown Prince's reluctance to allow genuine assessments of his mega-projects or their feasibility.

“If MBS has a mission beyond extending his power, you might expect to find it in Neom, the city he promised to build in the desert,” the journalist said.

“Finding Neom was the first problem. There were no road signs to it.”

Pelham described what he found: “After three hours’ drive we came to the spot indicated by the map. It was bare, but for the odd fig tree. Camels strolled across the empty highway. Piles of rubble lined the road, remnants of the town bulldozed to make way for the mighty metropolis.”

“The designated area is nearly the size of Belgium. As far as I could tell, only two projects had been completed, MBS’s palace, and something Google Earth calls ‘The Neom Experience Centre’ (when I drove to see it, it was obscured by a prefabricated hut).”

“The only other solid building I could see was a hotel constructed before Neom was conceived: the Royal Tulip,” he added.

“We think we’re about to start working, but every two months the consultants coin a new plan,” one NEOM manager told Pelham during his visit. 

“They’re still doing plans of plans. There was a kind of manic short-termism among these foreigners [NEOM managers]. Many were paid $40,000 a month, plus handsome bonuses.”

“It’s like riding a bull, you know you’re gonna fall, that no one can last on a bull longer than a minute and a half, two minutes, so you make the most of it,” the manager said.

Despite the high salaries, reports indicate that many foreign employees have left NEOM, overwhelmed by the gap between expectations and the on-the-ground reality.

Howeitat Tragedy

L'Opinion revealed, in May 2021, the challenges engineers faced in meeting Crown Prince Mohammed bin Salman's ambitious demands for NEOM. These included carving an 800-meter-high mountain slope, equivalent to a 30-story structure, to construct a series of hotels and residences.

There was another grandiose request revealed: building dozens of palaces, each larger than a football field, with 50 different design proposals submitted. However, the report noted, “Teams started withdrawing from the project, doubting whether anyone would purchase properties priced as high as $400 million each.”

The financial struggles and chaotic planning are not the only obstacles plaguing NEOM. The most glaring controversy stems from the forced displacement of 20,000 residents from the project’s designated land, most of whom belong to the Howeitat tribe, under direct orders from MBS.

On April 14, 2020, Saudi authorities announced the killing of Abdul Rahim al-Howeiti after he refused to leave his home to make way for the project.

On January 23, 2023, Saudi Arabia’s Specialized Criminal Court upheld death sentences for three members of the Howeitat tribe, Shadli, Ibrahim, and Atallah al-Howeiti, who had peacefully protested the forced evictions.

The Howeitat, one of Saudi Arabia’s oldest tribes, have lived as farmers and herders in the region for centuries. Yet, MBS has chosen to displace them, advancing his futuristic and uncertain project at the cost of their lives and heritage.