Saudi Arabia’s futuristic ‘mega cities’ could be quietly downgraded: report

Saudi Arabia’s trillion-dollar construction projects could be significantly scaled back, according to reports, as oil prices hit Riyadh’s ambitious diversification plans.

An anonymous government-linked source told the BBC that some projects in Crown Prince Mohammed bin Salman’s Vision 2030 plan, designed to wean the kingdom off its reliance on oil and gas revenues, could be delayed or scaled down due to a less optimistic forecast of Riyadh’s future budget.

Since being appointed crown prince in 2017, Prince Mohammed announced a range of huge “giga projects” to transform Saudi Arabia into one of the most advanced economies in the world, including NEOM, an area in the northwest of the kingdom it is hoped will become a regional hub for investment, industry, and tourism.

Continued low oil prices mean that some of the more ambitious elements of NEOM – such as The Line project – might be reduced in size and constructed over a longer period with the source telling the BBC that the planned 170km linear city will be just 2.4km in length when its first stage is completed in 2030.

“The decision will be based on multiple factors,” an anonymous advisor told the BBC.

“But there is no doubt that there will be a recalibration. Some projects will proceed as planned, but some might get delayed or scaled down.”

The New Arab could not independently verify the claims, but it follows other reports suggesting that the crown prince’s ambitious diversification plans, including by Bloomberg, that the first stage of The Line would be just 2.4km in length.

Saudi Arabia has relied on oil receipts for years to maintain a costly subsidy programme and bloated public sector, which gave citizens one of the highest standards of living in the region.

Economists had warned that the rapid development of renewable energy and new oil discoveries elsewhere in the world meant that the system could not be maintained indefinitely and that Riyadh had to move fast toward a service and industry-based economy.

Although deemed wildly optimistic, Prince Mohammed’s Vision 2030 project was welcomed by many economists who say the diversification plan, even if only partially implemented, could wean Riyadh off its reliance on oil and gas.

The de-facto ruler has been criticised for a brutal crackdown on activists, including the killing of local campaigners whose villages would be destroyed by NEOM.