Saudi Arabia's NEOM: Ambition in Crisis

In a surprising move, Saudi Arabia announced on 11 November 2024, that Nadhmi al-Nasr, the CEO of Neom,would be stepping down and that Ayman al-Mudaifer would be taking over the helm of the ambitious project. 

The change comes as part of a major restructuring of one of the world's largest and most high-profile construction ventures.

This comes amid growing doubts surrounding the development projects announced by the Gulf kingdom, which are effectively led by Crown Prince Mohammed bin Salman.

While the exact reasons for al-Nasr’s departure have not been disclosed, it marks a significant shift at the top of the NEOM project, which remains a top priority for the crown prince.

Delays, cost overruns, and staff changes have long plagued the mega-project, but reports have suggested even deeper crises. Some have raised concerns over whether the entire project can ever be realized.

The crown prince has committed an estimated $500 billion in funding, largely sourced from the Saudi Public Investment Fund, to kick-start the city’s development and lay its foundational structures.

Located in the far northwest of Saudi Arabia in the Tabuk region, the NEOM project stretches along 460 km of coastline on the Red Sea.

Shocking Confessions

In a revealing report on the ongoing changes at Saudi Arabia’s NEOM project, The Wall Street Journal has reported shocking admissions from senior Saudi officials, who conceded that “they don’t have the money to fund all of the giant projects in the country they once planned.”

“Saudi officials have said the country is delaying some projects and canceling others, although it didn’t announce details.”

“Executives from the country’s sovereign-wealth fund, the Public Investment Fund—which oversees Neom—are coming in to wield control over the project,” as confirmed by WSJ.

On 14 November 2024, three sources told Reuters, "Saudi Arabia has scaled back lofty ambitions for its NEOM gigaproject to prioritize completing elements essential to hosting global sporting events over the next decade as rising costs weigh.”

“Crown Prince Mohammed bin Salman has poured hundreds of billions of dollars into development projects through the kingdom's [Saudi Public Investment Fund] 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.”

“When the (NEOM) project was first pitched as an idea, costs were $500 billion. However, The Line alone was going to cost over a trillion which was why it's been scaled back,” as reported by Reuters.

A well-informed advisor commented to Reuters that “the Line involves hanging pathways, gardens and a stadium and aims to run on 100% renewable energy.”

Two other sources told Reuters that “the departure of Nadhmi al-Nasr, the long-time chief executive, was partly due to his inability to deliver key goals.”

“Another source with knowledge of the matter said on Wednesday several NEOM officials closely associated with the ex-CEO might also soon leave the company,” as mentioned by Reuters.

Mass Withdrawals

However, the mass withdrawals and shocks directed at NEOM have not been recent developments. In 2022, a wave of resignations hit the project.

Among the most notable figures to step down were Andy Wirth, a hospitality sector executive; Norman Foster, the renowned British architect; and Sam Altman, the former president of Y Combinator.

Ernest Moniz, former U.S. Secretary of Energy, and Klaus Kleinfeld, the former CEO of Alcoa, the American aluminum giant also resigned.

Crown Prince Mohammed bin Salman has long championed NEOM, often embellishing its vision and details. He once described the project as a "civilizational leap for humanity."

Launched in 2017 by bin Salman as part of his broader effort to promote his vision, the project was touted as a groundbreaking step for humanity. 

He envisioned a city where food would grow on water walls or floating structures, powered by the world’s largest eco-friendly energy generator. The city would feature an artificial ice mountain created by snow blowers, self-driving cars, and drones.

The name “NEOM” is a blend of the Greek word neo, meaning “new,” and the Arabic letter M, representing the word ‘Mustaqbal’ (future), together symbolizing “the new future.”

The NEOM Illusion

On July 28, 2022, The Economist published an in-depth report on Saudi Crown Prince Mohammed bin Salman, titled "MBS: Despot in the Desert."

The report cast a critical eye on NEOM, questioning the feasibility of the Crown Prince’s grandiose projects and his unwillingness to allow honest assessments of their viability. 

It noted that if bin Salman had any mission other than expanding his own power, it would be in NEOM, the city he promised to build in the desert.

The report quoted journalist Nicolas Pelham, who had visited the site, recalling his experience, “Finding [NEOM] was the first problem. There were no road signs to it. 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),” Pelham noted.

The report highlighted that bin Salman had provided everything for those working on the project, and that “there was a kind of manic short-termism among these foreigners. Many were paid $40,000 a month, plus handsome bonuses.” 

One of NEOM’s advisers told Pelham, “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.”

“Despite the high salaries, there are reports that foreigners are leaving the [NEOM] project because they find the gap between expectations and reality so stressful.”

The Tragedy of the Howeitat

According to Al-Estiklal, on May 4, 2021, Le Monde published that engineers found difficulties in responding to bin Salman's request to excavate the mountainside to a height of 800 meters, equivalent to the height of 30 floors, in order to build a series of hotels and residences.

It stated that among bin Salman's other demands is the construction of dozens of palaces, each larger than a football stadium, with 50 different models proposed.

However, the work teams began to leave the adventure, wondering if some were willing to buy these buildings, each of which could cost up to $400 million, it concluded.

But the financial crisis, chaotic planning, and visible disarray were not the only obstacles facing Neom. 

A far more serious issue arose from the direct orders of bin Salman, who oversaw the forced displacement of 20,000 citizens from the land designated for the project, the majority of whom were members of the Howeitat tribe.

On April 14, 2020, Saudi authorities announced the killing of Abdul Rahim al-Huwaiti who had resisted leaving his home for the project.

On January 23, 2023, the Saudi Court of Appeal upheld death sentences against three members of the Howeitat tribe—Shadli, Ibrahim, and Atallah al-Howaiti—over their peaceful opposition to the forced evictions and displacement of local residents for the NEOM project.

The Howeitat tribe, one of the oldest in Saudi Arabia, had been farming and herding in the region for centuries. 

But with bin Salman's grand vision for NEOM, they were swept aside in the pursuit of his futuristic plans, which many now question will ever come to fruition.