Saudi Arabia’s economy minister, Faisal Al Ibrahim, has denied reports that the kingdom’s NEOM megaproject is scaling back its plans. The futuristic desert development on the Red Sea coast is part of Saudi Arabia’s Vision 2030 initiative to diversify its economy away from oil. Recent reports suggested that The Line project, a glass-walled city meant to stretch for 105 miles by 2030, would be drastically reduced to just 1.5 miles, with the number of residents cut from 1.5 million to 300,000. However, Al Ibrahim insisted that all projects are moving forward as planned and that decisions are being made to optimize economic impact.
Reports have indicated concerns over finances for NEOM, as Saudi Arabia’s sovereign wealth fund, the Public Investment Fund, has not yet approved the project’s budget for 2024. While Al Ibrahim stressed that the projects would continue as planned, he acknowledged the need to consider the economic impact of the developments. The minister highlighted the importance of avoiding overheating the economy and ensuring healthy non-oil growth. He emphasized that the intended scale of NEOM remains unchanged, describing it as a long-term modular project designed to deliver specific impacts in various sectors.
Al Ibrahim reassured that private investors are showing increased interest in the NEOM projects, despite the reported changes in timelines and scales. He explained that the sectors being developed within NEOM did not exist previously and require significant investment from the government and the sovereign wealth fund. The minister stated that decisions would be made based on the needs and returns of the projects, aiming to minimize risks of overheating and leakage. He emphasized that all projects within NEOM would be delivered to their intended scale in a manner that prioritizes the needs of the projects and their economic impact.
The minister acknowledged that the economy in Saudi Arabia is growing rapidly but emphasized the importance of delivering projects in a way that benefits the country without sacrificing its interests. Al Ibrahim highlighted the unique nature of the NEOM project and its modular design, which allows for flexibility in delivering specific impacts in different sectors. He reiterated that there have been no changes in the overall scale of the mega projects within NEOM and that the focus is on optimizing for optimal economic impact.
Despite concerns raised in reports about the scaling back of plans for NEOM’s projects, Al Ibrahim’s statements at the World Economic Forum in Riyadh suggest a commitment to delivering on the kingdom’s ambitious vision. The minister’s reassurances regarding the continued progress of the projects and the growing investor interest indicate confidence in the long-term success of NEOM. By prioritizing economic impact and making decisions that align with the needs and returns of the projects, Saudi Arabia aims to ensure the sustainable development of NEOM and the broader diversification of its economy beyond oil.
