Saudi Arabia to focus more on projects that promise immediate gains
Saudi Arabia has paused construction of the Mukaab, a vast cube-shaped
skyscraper planned as the centerpiece of Riyadh’s New Murabba district, as authorities
reassess the project’s financing and overall viability, according to four
sources familiar with the matter.
The decision marks the latest setback for the
kingdom’s ambitious Vision 2030 gigaprojects, as the $925 billion Public Investment Fund (PIF) reins in
spending to control costs and redirect resources toward higher-priority
initiatives.
Once envisioned as a bold symbol of Saudi
Arabia’s futuristic ambitions, the Mukaab is now among several large-scale
developments facing delays or downsizing. The government is increasingly
shifting focus away from experimental megaprojects—such as NEOM’s The
Line—toward investments viewed as more urgent or commercially viable.
Priority projects now include infrastructure
linked to Expo 2030 and the 2034 FIFA World
Cup, as well as the $60 billion Diriyah Gate development and the Qiddiya
entertainment and tourism project, according to people familiar with the plans.
The strategic recalibration comes amid
mounting fiscal pressures, with oil prices remaining below the levels needed to
comfortably fund the kingdom’s sweeping transformation agenda.
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Construction suspended beyond early works
The Mukaab was designed as a 400-by-400-metre
metallic cube housing a massive dome with an AI-driven immersive display—touted
as the largest of its kind—viewable from a terraced structure rising more than
300 metres inside the building.
“When you enter Mukaab, you enter another
world,” New Murabba CEO Michael Dyke said at a Riyadh conference in December,
while acknowledging the challenges of delivering such an unprecedented
structure.
According to three sources, construction
beyond soil excavation and foundation pilings has now been suspended. However,
development of the surrounding New Murabba real estate is expected to continue.
Officials from PIF, the Saudi government, and
New Murabba declined to comment.
PIF redirects investment strategy
Reuters reported in October that PIF is
refocusing its strategy toward sectors such as logistics, mining, artificial
intelligence, and other industries offering faster and more reliable returns.
The shift follows an $8 billion writedown on gigaproject investments recorded
at the end of 2024.
Saudi Economy Minister Faisal al-Ibrahim told
Reuters last week that the government would not hesitate to delay, revise, or
re-scope projects when necessary, without naming specific developments.
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Over the weekend, Saudi Arabia also announced
the indefinite postponement of the 2029 Asian Winter Games, planned for
Trojena, another delayed NEOM project. The Mukaab, however, is the first major
project in Riyadh reported to be under formal feasibility review.
Originally billed as large enough to contain
20 Empire State Buildings, the Mukaab was set to offer roughly 2 million square
metres of interior floor space, making it the world’s largest single structure
by volume.
New Murabba timeline extended
Real estate consultancy Knight Frank estimates
the total cost of the New Murabba district at around $50 billion—comparable to
Jordan’s annual GDP—while projects awarded so far amount to roughly $100
million.
The district was initially expected to be
completed by 2030 but is now scheduled for completion by 2040. Government
estimates had projected the development would deliver 104,000 homes, contribute
180 billion riyals to GDP, and create more than 330,000 jobs by 2030.
When unveiled, the Mukaab’s design sparked
debate on social media, with some critics noting its resemblance to the Kaaba,
Islam’s holiest site in Mecca.
Source: Reuters
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