Saudi Arabia cancels Italian company’s project amid wider restructuring

 

Italian contractor Webuild confirms cancellation of Saudi dams project 

Italian contractor Webuild has confirmed that Saudi Arabia’s NEOM has terminated its contract for major water infrastructure works at Trojena, signaling a significant change in the delivery of the high-profile mountain development.

In a statement on March 25, Webuild said NEOM invoked a “termination for convenience” clause covering the construction of three dams intended to supply a 2.8km-long artificial freshwater lake, along with the accompanying architectural centerpiece, The Bow. The termination takes effect on March 29, 2026. At the time of cancellation, work was roughly 30% complete, with an estimated €2.8 billion of remaining work.

 

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Originally valued between $4.7 billion and $5 billion, the contract formed a core component of Trojena’s water infrastructure, critical for creating a year-round recreational lake in a high-altitude desert environment. Webuild confirmed that all costs incurred, including demobilization and site disengagement, will be reimbursed under the contract, leaving the company financially unaffected.

This termination follows a string of recent contract cancellations by NEOM across Trojena and other areas of the broader development, including structural steel works for the Trojena ski village and tunneling for The Line, NEOM’s flagship linear city. Webuild noted that other contractors in the Trojena zone have faced similar contract terminations.

Launched in 2017 as part of Saudi Arabia’s Vision 2030, NEOM aims to create a futuristic, high-tech urban and tourist hub. Trojena, announced in 2022, was designed as a mountain destination with winter sports, luxury residences, and a central man-made lake supported by complex dam infrastructure. The dam system represented one of the most technically challenging hydraulic projects within NEOM, requiring water storage, regulation, and environmental management in a region with no natural freshwater sources, as well as construction in mountainous terrain reaching 2,600 meters.

 

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The cancellations come amid a wider reassessment of NEOM’s priorities. Authorities have been reviewing giga-project spending since 2024 due to rising costs, delivery challenges, and shifting funding strategies, with resources increasingly redirected to other national programs.

Webuild emphasized that its broader construction backlog, excluding Trojena, remains above €50 billion.

Source: International Water Power