As part of its drive to reduce its overwhelming dependence on oil exports, Saudi Arabia is planning to build NEOM, a $500 billion, 26,500 square kilometer business zone and industrial site.
How will it operate?
It will be powered entirely by renewable energy and will focus on industries including energy and water, biotechnology, food, advanced manufacturing, and entertainment. An army of robots will be on hand to carry out “repetitive and arduous” tasks, according to promotional material. Saudi Crown Prince Mohammed bin Salman has appointed Klaus Kleinfeld, a former chief executive of Siemens AG and Alcoa Inc, to run the project.
Where will it be located?
Adjacent to the Red Sea and the Gulf of Aqaba and near maritime trade routes that use the Suez Canal, the zone will serve as a gateway to the proposed King Salman Bridge, which will link Egypt and Saudi Arabia.
What’s the project’s time frame?
The first phase of construction is expected to be completed by 2025, but details of what that will entail have yet to be released. By 2030, the city is expected to have received $100 billion in investment from the Public Investment Fund, Saudi Arabia’s sovereign wealth fund.
It all sounds madly ambitious. How likely is it to succeed?
Saudi Arabia will need massive financial and technical resources to build NEOM on the scale it was presented to investors. Past experience suggests this may be difficult. Bureaucracy has slowed many Saudi development plans, and private investors are cautious about getting involved in state-backed projects, partly because of an unpredictable legal environment. Also, other mega projects in the region, such as the UAE’s carbon-neutral city Masdar, have yet to make good on their original promise.