Saudi Arabia's Neom megaproject, which has absorbed more than 67 trillion won ($47 billion), is at risk of collapse. The ambition to build the world's largest futuristic city is running into funding shortages and practical limits, with components being canceled or scaled back one after another.
Saudi Arabia has indefinitely suspended plans to build the Neom Stadium, which it had been pursuing ahead of the 2034 FIFA World Cup, the Financial Times reported on the 12th.
The 46,000-seat stadium was to be built within The Line, the centerpiece of Neom. Plans called for the venue to sit 350 meters above sea level, accessible only by self-driving cars and high-speed lifts, and to run on renewable energy including wind and solar power.
The Line, the linear city that served as Neom's main symbol, has been cut from an originally planned 170 kilometers to 2.4 kilometers — about 1.4% of the original plan.
Neom Co., the Saudi developer, terminated construction contracts for The Line held by Samsung C&T and Hyundai Engineering & Construction in March, and in May canceled a 2.5 trillion won high-speed rail contract linking Oxagon and The Line. Trojena, the mountain resort set to host the 2029 Asian Winter Games, has also given up its hosting rights.
67 Trillion Won Spent Before Retreat: What Went Wrong
The central problem is costs the kingdom cannot carry. Neom's estimated completion cost, initially put at $500 billion (about 740 trillion won), later swelled to $8.8 trillion (about 13.2 quadrillion won) — 25 times Saudi Arabia's annual budget.
Holding to a low-oil-price policy amid competition from U.S. shale gas worsened the fiscal position, and spending on the 2030 Riyadh Expo and the 2034 World Cup forced a reordering of priorities. This year, the closure of the Strait of Hormuz amid the U.S.-Iran war has also disrupted oil exports.
Within the Saudi government, the view has spread that the original concept and approach had limits. According to internal documents obtained by The Wall Street Journal, staff had raised concerns from the outset about environmental, architectural and constructability problems, along with astronomical costs. What looked unworkable in scale from the outside was already understood internally.
The government plans to turn Neom into a hub for the artificial intelligence industry, judging that the coastal location is well suited to data centers because it allows seawater cooling and renewable energy supply.
The head of Saudi Arabia's sovereign wealth fund said the plan is to reorganize 13 strategic sectors into six integrated economic ecosystems, closely examining financial returns to contribute to the kingdom's long-term prosperity. Still, with more than 67 trillion won already committed, losses appear unavoidable given that billions of dollars more will be needed simply to wind the project down.