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Saudi Crown Prince Mohammed bin Salman’s flagship project Neom is set to be significantly downscaled and redesigned as a review of the massive development nears completion after years of delays and budget overruns.
People briefed on the matter said Prince Mohammed, Neom’s chair, now envisages something “far smaller”, a sign that Riyadh acknowledges the failings in its original highly ambitious concept, the communications around it and the initial phase of construction.
The development stretches along Saudi Arabia’s Red Sea coast and covers an area roughly the size of Belgium.
The Line, a futuristic linear city that is the giga-project’s centrepiece, is to be radically scaled back. Neom could now become a hub for data centres as part of Prince Mohammed’s aggressive push for the kingdom to become a leading AI player, the people said.
The changes come as Riyadh seeks to manage its finances as it grapples with tightening liquidity after a decade of massive spending and with oil prices subdued. It also still has hard deadlines to meet in costly preparations to host the Expo international trade fair in 2030 and the football World Cup in 2034.
Since its initial launch, Neom has drawn widespread scepticism inside and outside the kingdom. But people briefed on the matter argued the planned changes illustrated a willingness within government to adapt to realities as it takes stock of its plans.
“It shows that the system has a capacity to adjust its goals,” said one of the people.
The year-long review is expected to conclude by the end of the first quarter of this year or shortly after.
Neom said in a statement to the FT it was “always looking at how to phase and prioritise our initiatives so that they align with national objectives and create long-term value”.
“As a development that’s meant to span generations, Neom is advancing projects in line with strategic priorities, market readiness and sustainable economic impact,” it said.
After Neom’s launch in 2017, multiple megaprojects were announced for the development, including The Line, which was ultimately supposed to run 170km inland from the sea over desert mountains, a ski resort called Trojena that was set to host the Asian Winter Games in 2029, and a coastal logistics and industrial zone known as Oxagon.
Riyadh announced on Saturday that Trojena, which will be downsized, would no longer host the winter games as scheduled.
The person briefed on the matter said architects were already working on redesigning The Line — which has already been scaled back considerably — to develop a more “modest” project that could utilise existing infrastructure built over the past few years.
“The Line will be a totally different concept. It will use the existing infrastructure in a totally different manner,” the person said.
The person said there would be a greater focus on “industrial” sectors in Neom, including it becoming a hub for data centres.
“Data centres need water cooling and this is right on the coast so it will have seawater cooling. So it will be a major centre for data centres,” the person said.
Neom said that as the kingdom “works to establish itself as a global hub for data and AI, Neom is focused on attracting investors, partners and tenants in these fast-growing sectors”.
It added that the project had “several natural advantages” including digital infrastructure, its location “at the crossroads of three continents”, access to “abundant and cost-effective renewable energy” and the availability of land.
Neom had for years been a cash cow for consultants, construction companies and architects as tens of billions of dollars were poured into what was described as the world’s largest construction site. But work stalled after the longtime chief executive Nadhmi al-Nasr abruptly departed in November 2024.
His replacement, Aiman al-Mudaifer, last year launched a “comprehensive” review of the scope and priority of the projects within the development.
Prince Mohammed, who unveiled Neom as part of his grandiose plans to modernise the kingdom and diversify its oil-addicted economy, has publicly stated he would cancel or change projects if it were in the nation’s interest.
“We are determined — by the grace and power of God — to achieve and complete them [his transformation goals],” he told the consultative Shura Council in September. “However, we also affirm that we will not hesitate to cancel or make any radical amendment to any programmes or targets if we find that the public interest so requires.”
Neom is owned by the near $1tn Public Investment Fund, which is also chaired by Prince Mohammed and is tasked with spearheading the transformation plans. But it has come under pressure to deliver returns on its huge investments as Riyadh has recalibrated its spending priorities.
The PIF’s portfolio of megaprojects is also being reviewed.
Additional reporting by Alison Killing in London
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