Saudi Arabia’s NEOM re-calibrating amid evolving realities
Saudi Arabia’s flagship NEOM project is undergoing its most
significant transformation since its inception. Recent contract cancellations
and construction suspensions suggest that the original vision of a futuristic
desert megacity is no longer feasible in its initial form.
Construction of THE LINE, the
project’s iconic 170-kilometre mirrored city, was suspended in September 2025,
with just 2.4 kilometres of foundation completed. The population target for
2030 has been dramatically reduced, from 1.5 million to fewer than 300,000
residents.
Recent
Revisions in Plans
The scale-back has intensified over
recent weeks.
A leaked internal audit, reported by
the Wall Street Journal, revealed projected costs of $8.8 trillion and a
completion timeline extending to 2080. Following this, NEOM cancelled a roughly
$1 billion tunnelling contract with South Korea’s Hyundai Engineering &
Construction, part of the underground rail network for The Line.
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More recently, Malaysia’s Eversendai confirmed the termination of
its structural steel contract for the Trojena Ski Village.
Strategic
Pivot Towards AI Infrastructure
NEOM is now shifting focus towards
AI infrastructure. A $5 billion partnership with DataVolt to build a data
centre underscores Saudi Arabia’s ambitions to become a global AI hub. NEOM’s
coastal location is seen as advantageous for cooling and renewable energy
generation.
Of all NEOM’s ongoing components,
the Green Hydrogen plant at Oxagon is the most advanced, reaching 80%
completion and on track for delivery by mid-2026. Exports of green ammonia are
expected to begin in 2027.
NEOM
Timeline: 2017–2026
Oct 2017 – NEOM was unveiled by Crown Prince Mohammed bin Salman at
the Future Investment Initiative in Riyadh, presenting Saudi Arabia’s most
ambitious development project to date.
2019 – Groundbreaking on Phase One construction; NEOM Bay
Airport opened, and AECOM was appointed as programme manager, marking the
project’s shift from concept to construction.
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Jan 2021 – The Line was announced: a zero-car, 170-kilometre
linear city promising urban living without roads or emissions, with everything
accessible within a five-minute walk.
Nov 2021 – Oxagon, NEOM’s floating industrial city, was
introduced as a next-generation coastal logistics and manufacturing hub powered
by clean energy.
Mar 2022 – Trojena, a year-round mountain tourism and ski
destination, was unveiled, aiming to bring winter sports to the Arabian desert.
Oct 2022 – NEOM was chosen to host the 2029 Asian Winter Games,
giving Trojena international recognition and a strict timeline for completion.
Oct 2024 – Sindalah celebrated its opening as NEOM’s first completed
component, though it remains closed to the public. NEOM CEO Nadhmi al-Nasr was
removed the same month.
Sep 2025 – Construction on The Line was officially suspended
with only 2.4 kilometres completed; on-site workers were relocated to Riyadh.
Jan 2026 – The Asian Winter Games were relocated from Trojena to
Almaty, Kazakhstan, following a two-year delay in NEOM’s timeline.
Mar 2026 – NEOM cancelled major tunnelling and structural steel
contracts while confirming a strategic pivot toward AI data centre development.
Source: www.mepmiddleeast.com
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