Neom’s CEO Abruptly Ditches the Project. In Response, Saudi Arabia Says the Project Is Ramping Up

After completing the first phase of Neom, Saudi Arabia proudly revealed images in late October of what will become a luxurious port in the desert designed for millionaires. Shortly after, the nation made headlines again with news about the beginning of a massive skyscraper cube that could house 20 Empire State Buildings. However, it appears that the excitement is starting to wane. The head of Neom recently left the project without warning.

The CEO’s departure. The Wall Street Journal recently reported that former Neom CEO Nadhmi al-Nasr had abruptly left his position. This departure signifies a major restructuring at one of the world’s largest construction projects. While the exact reasons for Al-Nasr’s departure remain unclear, it comes amid significant financial and organizational challenges.

Under the leadership of Saudi Crown Prince Mohammed bin Salman, Neom includes ambitious mega-projects such as a ski resort in a desert location, a floating business district, and two skyscrapers taller than the Empire State Building. Despite these massive plans, Saudi Arabia seems to be making an ongoing effort to “normalize” the situation surrounding the project.

The Line is still going strong. A recent update on the project’s website included a new rendering and confirmed that Saudi Arabia is making steady progress in the construction of The Line. Developers have also released additional details about the project and information about the architecture firms involved in bringing this ambitious vision to life.

The ultimate aim of The Line is to extend more than 100 miles, although the initial phase will cover only 1.5 miles. The structure will stand at 1,640 feet tall and 660 feet wide, designed to accommodate a city with a population capacity of about 300,000 residents. It’ll feature advanced air conditioning systems to maintain a comfortable climate within the desert environment.

Companies involved. Among the well-known companies contributing to the project is the U.S. global design firm Gensler, which designed the Shanghai Tower, the world’s third-tallest building. Gensler will leverage its expertise in urban planning and transportation design, as well as oversee the development of public spaces.

Meanwhile, Austrian firm Delugan Meissl Associated Architects has been appointed as the lead urban planner and will focus on the detailed design of the first phase. Its approach will incorporate a range of areas, including microclimate, ecology, mobility, logistics, and sustainability.

Additionally, United Kingdom-based Mott MacDonald will handle the city’s infrastructure engineering, a vital task given the desert conditions. The company will manage essential systems like water, power, and sewage while also implementing AI and surveillance technology to enhance efficiency.

Difficulties and delays. While the project may have secured new contracts and appears to be on track, it has encountered several challenges. In fact, Neom has faced numerous issues, including delays, cost overruns, and high staff turnover. The Wall Street Journal also reported that Saudi executives acknowledge that current funds are insufficient to cover all the originally planned projects. As a result, the country’s Public Investment Fund (PIF) has assumed a more controlling role.

Following the unexpected departure of Al-Nasr, Aiman al-Mudaifer, a PIF real-estate executive, has stepped in as the interim CEO. The board has referred to this transition as a “strategic decision.” Notably, The Wall Street Journal highlights that besides Al-Mudaifer, other senior executives have also left the project. They include Wayne Borg, who led the media division, and Antoni Vives, who was responsible for leading The Line development.

Foreign investment. Despite several efforts, attracting the anticipated foreign investment remains a significant challenge for the project. In particular, The Line, which was initially planned and later scaled down in its first phase, is facing high costs that could exceed $2 billion. This amount is considerably higher than what Saudi Arabia had originally allocated (or planned to allocate).

Although the PIF has assets estimated at $1 trillion, The Wall Street Journal points out that many of these assets are invested in holdings that are difficult to liquidate quickly, such as stakes in Aramco and private equity funds. In the end, while the CEO has departed, officials in Saudi Arabia insist that the project’s roadmap remains unchanged.

Image | Neom

Related | Saudi Arabia Has 'The Line,' But It's Not the Only Country Building a City in the Desert. China Is Also Hard at Work, With the Help of AI