The Saudi Arabian government will spend $16 billion on cancelling parts of its Neom megacity project, which is more money than it will spend building them, according to a report.
Neom was set to see hundreds of billions pumped into the construction of a mountain ski resort, several coastal resorts and an industrial zone along the coast of the Red Sea, in a futuristic super-project aimed at boosting the country’s tourist industry.
At the heart of the project was The Line, a 170-kilometre city built in a straight line through the desert, plans for which were significantly scaled back earlier this year.
Now, nearly a decade after the plans were laid out by crown prince Mohammed bin Salman as part of Saudi Arabia’s Vision 2030, Neom’s budget for the next five years includes 60 billion riyals ($16 billion; £12bn) in anticipated payments to contractors to terminate long-term contractors, Semafor reported.
The payments are tied to penalty clauses in elements of the contract that have been cancelled due to the significant downscaling of a project that Prince Mohammed hoped would be a critical part of diversifying Saudi Arabia’s economy away from oil and towards international tourism.
After a series of delays and ballooning costs, the Financial Times reported in January that the project would be scaled back, with officials envisaging something “far smaller” than the original design.
At the time, leading architects told The Independent that the project had been doomed from the start.
“It’s an excellent example of a type of architecture where you propose something provocative to get a reaction. It’s always been an advertising gimmick for Saudi Arabia,” Professor James Campbell, an architect and architectural historian at the University of Cambridge said.
The Line was rebuked as unrealistic by experts. The limitation, Prof Campbell said, was not that it would be physically impossible to build, rather that the city did not make sense from an urban planning perspective and was not realistically affordable in terms of cost.
Prince Mohammed is reported to have come up with the idea of a linear city himself, with the original design – put forward by Los Angeles architecture firm Morphosis – envisaging a 2km-wide strip running from the sea to the mountains, connected from one end to the other by rail.
The Line itself was forecast to cost $500bn (£375bn). The Saudi Kingdom is reported to have spent $64bn (£48bn) on Neom so far.
The scaling down of the Neom project came after a strategic review which has led to layoffs, corporate restructuring, and a reassessment of the plans, Semafor reported earlier this year. The review was launched when Aiman Al-Mudaifer took over as chief executive of the Neom firm last year.
The Independent has contacted Neom for comment.
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