The Line: Saudi Arabia's $2 Trillion Futuristic City Faces Financial Abyss

Thursday 09 May 2024 - 12:45

An article by the Wall Street Journal has revealed the staggering costs engulfing Saudi Arabia's ambitious NEOM project, the brainchild of Crown Prince Mohammed bin Salman. With an estimated total cost exceeding $2 trillion, the futuristic city known as "The Line" faces an uncertain future as expenditures spiral out of control.

Prince Mohammed bin Salman, Saudi Arabia's Prime Minister since 2022, might be forced to abandon The Line due to exponentially escalating costs. The megaproject, envisioned as a 500-meter-tall skyscraper stretching nearly 170 kilometers in a straight line, is seen as either a glimpse of the future or one of the greatest follies in recent history. While the concept is elegant on paper, it clashes with reality, never before has anyone attempted to construct such a massive structure.

The total office and residential space will exceed that of New York City by 29%. If completed as planned, The Line will be home to millions of people, requiring a significant effort to convince them to relocate to a largely unfinished structure. This approach starkly contrasts with how the world's most desirable cities have organically developed over time.

Why NEOM's Costs Are Skyrocketing

The project's exorbitant costs and a series of contractor missteps are proving to be its undoing. According to the Wall Street Journal, the construction's chaotic start has already caused the cost of the first 2.5 kilometers to exceed $100 billion. These challenges have forced Prince Mohammed to revise the project's timeline, with only 2.4 kilometers, housing fewer than 200,000 people, expected to be completed by 2030, rather than the intended 16 kilometers that would accommodate millions of residents.

NEOM's setbacks sometimes seem almost absurd. For example, the company reportedly spent $5 billion to construct housing for the 100,000 workers sent to the site, only to rapidly demolish it when The Line's revised route intersected the housing area. In another case, a 15-meter-deep marina was excavated, but the resulting mountain of waste and soil was deposited directly in The Line's path, necessitating a costly re-excavation to remove the artificial obstacle.

On a positive note, these mistakes might provide valuable lessons for future phases, potentially enabling the completion of at least a portion of the project. The question remains whether The Line will be completed or face an abrupt halt. The project's official website seems focused on attracting major investors, underscoring the urgent need for funding despite an increasingly uncertain future.