Saudi Arabia’s ambitious Neom Project, which involves the building of a 100-mile-long skyscraper called The Line, is rapidly turning into a financial and management debacle. Reports say that the projected costs have risen to an eye-popping $8.8 trillion, more than 25 times the kingdom’s annual budget.
Financial Manipulation and Skyrocketing Costs
An audit report revealed that some Neom managers manipulated finances to hide rising project costs. These included overcharging prices for its ski resort and charging higher rates for hotel rooms to make the project look more lucrative than it truly is. For instance, a boutique hiking hotel room rate was raised from $489 per night to $1,866, while the rate for a glamping area went up from $216 to $794 per night.
The report further stated that management consulting firm McKinsey, which has collected over $130 million a year from the project, supposedly assisted in covering up these cost manipulations. But the firm did not admit to being involved in any illegal financial reporting.
Construction Challenges and Unrealistic Goals
Initially proposed as a 100-mile-long skyscraper, which would be 1,600 feet tall, The Line project is now being downgraded. The most recent proposal has the goal of finishing only a 1.5-mile section by 2034. Proposals to cut the skyscrapers’ height to approximately 1,000 feet were vehemently rejected by Saudi Crown Prince Mohammed bin Salman, the prime promoter of Neom.
Amid the setbacks, the previous CEO of the project, Nadhmi al-Nasr stepped down late in 2024 after claims of foreign worker fatalities while building.
Suspect Progress
In spite of extravagant expenditures, such as a $45 million launch celebration where celebrities such as Will Smith and Tom Brady were in attendance, much of the Neom project is still not finished. The Sindalah resort, for example, is not yet accessible to the public even months after its purported opening.
The Future of Neom
Saudi Arabia’s Neom project is turning out to be an expensive venture marked by mismanagement, financial engineering and unrealistic expectations. If it keeps going the way it is headed, the futuristic city could end up being a cautionary tale of overreach and bad planning.
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