Private boats were peacock nearby, and some of some of the biggest celebrities were present as Saudi Arabia partially opened Neom, its ambitious $ 500 billion mega in the desert. The event was to showcase Saudi Arabia for the future. But there are bodies.
According to a report by Wall Street Journal, the first phase of the project was, Sindlah, was before and far behind the budget. The cost of $ 1.3 billion was initially estimated, the luxury resort’s price tag ran a balloon of about 4 billion dollars. Most particularly, Crown Prince Mohammed bin Salman – was absent from the phenomenon – the mastermind of the Propect. Week later, NEOM CEO, Nadhmi Al-Nasr was replaced.
Since the launch of 2017, NEOM has consumed more than $ 50 billion, says the report, but its boldest idea – such as a floating business district, a ski resort in the desert, and 170 kilometers – Large linear city – has struggled for materiality.
The Wall Street Journal accessed reports that reveal extensive financial manipulation led by NEOM. An internal audit found evidence that with the help of Consultants McCiny and Company, authorities used highly optimistic financial estimates to justify the costs of growth. Audit cited the “manipulative manipulation” of data by “some members of management”.
The report claimed that a draft board presentation from 2023 estimated that $ 8.8 trillion would be required to complete NEOM by 2080 – Saudi Arabia’s annual budget over 25 times. Even the first phase, set to run until 2035, is expected to cost $ 370 billion.
Neom was to redefine urban life, in which Crown Prince Salman compared it to Egyptian pyramids. The line, its centralpeeth, was conceived as a future city at a distance of 170 km in the desert, placed within two parallel skyscrapers compared to the Empire State Building.
But the scale has proved to be heavy. By 2030, the original plan to build a 16 km line was already ambitious, requiring glass and steel present throughout the cities. Even later it was revised up to 2.4 km, including only one half mile section, which included a stadium – until 2034.
Engineering challenges and rising costs have compromised. The line makes the height of 1,640 feet difficult, and NEOM authorities suggested to reduce it by 1,000 feet to cut costs. The Crown Prince rejected it, which insisted on saving elsewhere.
Ski Resort, Trosena has also seen the cost spiral. Wall Street Journal, citing a review of 2023, found an increase of $ 10 billion in expenses. To balance the books, the revenue estimates were reportedly inflated – the hotel room rates suddenly three times or the investment was quadrupled to justify the investment.
Saudi officials have long stressed that NEOM will eventually attract private investment. But the Foreign Direct Investment in the Kingdom is far below the goals – just $ 26 billion in 2023, against an official target of $ 100 billion per year.
Potential investors are careful. Along with the scale and complexity of many projects, the regulatory environment in Saudi Arabia is concerned about. The International Monetary Fund has urged more transparency at the project expense.
