What is NEOM?

NEOM is a visionary undertaking initiated by Saudi Arabia to construct a futuristic city from the ground up. Encompassing a vast expanse across Saudi Arabia, Jordan, and Egypt, NEOM aims to become a global center for innovation, technology, and sustainability. The project integrates cutting-edge technologies such as artificial intelligence, renewable energy, and advanced manufacturing into its infrastructure. Its ultimate aim is to establish a sustainable and environmentally conscious urban environment that attracts international businesses and residents. NEOM forms a pivotal part of Saudi Arabia’s Vision 2030 strategy, designed to diversify the nation’s economy and decrease reliance on oil.

Who is the investor for NEOM?

NEOM is primarily funded by the Saudi Arabian government through its Public Investment Fund (PIF), the kingdom’s sovereign wealth fund. The Saudi government has allocated substantial financial resources to support NEOM’s development as part of its Vision 2030 plan, aimed at diversifying the economy away from oil. Additionally, NEOM has garnered interest from various international investors and companies eager to participate in the project’s growth.

 

NEOM has several highlighted projects, but one of the most notable is “The Line.” It’s a revolutionary concept that envisions a linear city stretching over 170 kilometers, designed to prioritize sustainability, walkability, and quality of life. The Line will be powered by renewable energy sources and will provide essential services within a five-minute walk from anywhere in the city. This project aims to redefine urban living by integrating cutting-edge technology while preserving nature and promoting a healthier lifestyle for its residents.

 

What is Line ?

“The Line” refers to a revolutionary concept for a linear city spanning over 170 kilometers. It’s designed to be a part of NEOM, the futuristic city being developed in Saudi Arabia. “The Line” is envisioned as a city where urban living is redefined to prioritize sustainability, walkability, and quality of life.

Key features of “The Line” include:

• Sustainability: The city will be powered entirely by renewable energy sources, reducing its carbon footprint.
• Walkability: “The Line” will be designed to promote walkability, with essential services located within a short walking distance, encouraging a healthier lifestyle.
• Smart Infrastructure: Cutting-edge technology will be integrated into the city’s infrastructure, creating a smart city that is efficient and responsive.
• Nature Preservation: Despite its urban nature, “The Line” will prioritize the preservation of nature, incorporating green spaces and sustainable landscaping.

Overall, “The Line” represents an innovative approach to urban development, aiming to create a sustainable and livable city for the future.

What is The Project Coast of Line?

Estimated building costs for The Line will be around 100 to 200 billion USD, while other estimates go as high as 1 trillion USD. The plan was announced in January 2021 by Saudi Crown Prince Mohammed bin Salman. The first phase of the project is scheduled to be completed in 2030.

Why Saudi Arabia Scaling Back LINE?

A few days ago, Bloomberg reported that the Kingdom had scale back its ambitions for the project, with it now expected to house fewer than 300,000 residents by 2030. Also, officials are expected to complete only 2.4 km of the project by 2030, of the total 170 km.And as a result of this, one contractor has started to dismiss a portion of the workers it employs on the site.

Commenting on the same, Finance Minister Mohammed Al Jadaan said in December. “The delay or rather the extension of some projects will serve the economy.”

here are a multitude of reasons why Saudi Arabia is scaling back its ambition over The Line.
The main reason seems to be the economics of it all. The overall Neom budget for 2024 has yet to be approved by Saudi Arabia’s sovereign wealth fund amid declining cash reserves. According to academics who study it, the wealth fund — known as the Public Investment Fund — could need hundreds of billions of dollars more from the Saudi state.

As Tim Callen, a visiting fellow at the Arab Gulf States Institute think tank in Washington told Wall Street Journal, “It’s mind-boggling the amount of stuff that’s trying to be done here. He estimates the government may need to contribute another $270 billion to PIF by 2030.

And as spending rises, oil revenues have levelled off. The IMF estimated oil prices would need to be above $86 a barrel in 2023 and $80 a barrel this year to balance the government’s budget. Currently, oil prices are drifting at the $81-mark for the past one year.

Another reason, as per a Bloomberg report, is Prince Mohammed’s changing vision for the project. Moreover, several people involved in the project keep changing, describing it as “untethered from reality”.