Neom’s acting chief reviews Saudi mega-project after setbacks
Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
The acting chief executive of Saudi Arabia’s Neom has in recent weeks launched a “comprehensive review” of the scope and priority of projects within Crown Prince Mohammed bin Salman’s flagship scheme, two people familiar with the matter said.
Aiman al-Mudaifer was appointed acting chief executive in November following the abrupt departure of Nadhmi al-Nasr, who led the $500bn mega project for six years but faced increasing scrutiny over his management style and pressure to deliver results.
One of the people familiar with the matter said the main projects at Neom were “in general going on”, but added that some were being “reviewed in terms of their scope”.
Some tourism developments on the Red Sea where work had not yet started had been delayed, the person added.
The review “is taking place in an environment of limited resources”, the person said. “Some things were done that need to be looked at again.”
The “gigaproject”, which officials describe as the world’s biggest construction site, covers a vast area of desert and mountains along the Red Sea, stretching up to the borders of Jordan and Egypt.
It includes multiple developments, including a futuristic linear city called The Line, which is ultimately supposed to run 170km; a coastal logistics and industrial zone known as Oxagon; and a ski resort called Trojena that is set to host the Asian Winter Games in 2029.
Nasr, a former executive at the state oil company Saudi Aramco, joined Neom after establishing a reputation for overseeing large state infrastructure projects.
But Neom has struggled with projects running over budget and timelines, and drawn scepticism from inside and outside the kingdom since its launch in 2017. Saudi officials counter sceptics by saying Neom is a 50-plus year — or even 100-year — project.
The review comes as Riyadh recalibrates its spending priorities after almost a decade of frenetic activity as oil prices drop and the government seeks to manage the vast scale of projects announced as part of Prince Mohammed’s Vision 2030 programme to develop the kingdom.
As a result, state-related entities are being forced to tighten their belts, consultants fees are being slashed and some projects are being scaled back or phased over a longer period of time.
A second person said the review was being conducted to “decide what to double down on”.
“It’s just general good governance. It’s related to the [spending] recalibration,” the person said. “There’s huge pressure on Neom to deliver because it’s seen as totemic — it’s inextricably linked to Vision 2030.”
“It’s an unprecedented project, not just for Saudi Arabia.”
Prince Mohammed is the hands-on chair of Neom, which is the centrepiece of his highly ambitious economic transformation programme to reduce the kingdom’s dependence on oil revenue. Neom is owned by the Public Investment Fund, the $940bn sovereign wealth fund.
When it announced Mudaifer’s appointment, Neom said the project would enter “a new phase of delivery”, adding that the new leadership would ensure “operational continuity, agility and efficiency to match the overall vision and objectives of the project”.
Mudaifer, who previously headed the local real estate division of the PIF, is expected to be appointed the permanent CEO, according to one of the people.
The PIF is overseeing all the major development projects across the kingdom and is coming under mounting pressure to deliver results on the ground, almost a decade after Prince Mohammed unveiled Vision 2030.
Neom did not respond to a request for comment.
