The $8.8-trillion mega city in the Arabian desert is heading towards disaster unless the Saudi rulers scale down the futuristic project.

Saudi Arabia’s ambitious project to build a high-tech desert metropolis is running into severe financial and logistical troubles, with internal reports revealing deliberate manipulation of financial data to mask the project's soaring costs.

Grand vision vs. reality

Neom, designed as a crown jewel of the kingdom’s futuristic ambitions, includes a luxury coastal resort, a ski destination in the mountains, and The Line—a planned 106-mile-long pair of 1,600-foot skyscrapers. But the costs of realizing this dream have spiraled out of control.
https://www.neom.com/en-us

According to The Wall Street Journal, capital expenditure estimates to complete Neom by 2080 have ballooned to a staggering $8.8 trillion—over 25 times the kingdom’s annual budget.

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An internal audit obtained by WSJ found "deliberate manipulation" of financial data by management members, attempting to conceal the project’s massive overruns. Some of these efforts included artificially inflating projected hotel rates to make Neom appear more financially viable. Prices for accommodations at the planned ski resort were dramatically increased, with one boutique hiking hotel’s rate soaring from $489 to $1,866 per night.

Consulting giant McKinsey, hired to assist the project, was reportedly involved in these financial projections. However, a spokesperson for the firm denied any involvement in manipulating financial reports.

Downsizing the Line

One of Neom’s most ambitious components, The Line, was originally envisioned as a 100-mile-long linear city. However, due to cost constraints, even the first phase has been dramatically downsized. Initial plans for a 10-mile segment have been revised to just 1.5 miles within the next decade.

Neom’s coastal resort, Sindalah, remains largely unfinished. Yet, Saudi officials held a $45-million launch party in October, attended by celebrities such as Will Smith and Tom Brady. Four months later, the resort’s golf course and hotels are still not open to the public.

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There were also recommendations to reduce the skyscrapers’ height from 1,600 feet to 1,000 feet to save costs, but these were rejected by Crown Prince Mohammed bin Salman himself.

Adding to Neom’s troubles, former CEO Nadhmi al-Nasr resigned in November, just weeks after a documentary alleged that tens of thousands of foreign workers had already died during the project’s construction.

Despite these setbacks, officials still hope to complete a portion of the project by 2034.

Envisioned as a revolutionary city to modernize Saudi Arabia, Neom has instead become a cautionary tale of overambition, financial mismanagement, and unrealistic expectations. Shutting down the project entirely carries reputational risks for the kingdom and bin Salman personally, therefore most likely it will be scaled down in the months to come.

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