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Home / NEWS / Saudi Arabia reveals construction progress updates of $500bn Neom

Saudi Arabia reveals construction progress updates of $500bn Neom

by Neha Bhatia on Oct 25, 2018


Preparations are under way to begin construction work at Neom Bay, the Public Investment Fund-backed project's CEO said during Future Investment Initiative 2018 in Riyadh [image: Twitter / discoverneom].
Preparations are under way to begin construction work at Neom Bay, the Public Investment Fund-backed project's CEO said during Future Investment Initiative 2018 in Riyadh [image: Twitter / discoverneom].

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Construction activity is progressing on Neom, Public Investment Fund’s (PIF) $500bn (SAR1.9tn) gigaproject along Saudi Arabia’s Red Sea coast. Updates provided by the kingdom state that the project has “entered the first phase of actual development” after the acceleration of preparation works to develop infrastructure for Neom’s initial residential area.

Work on Neom’s first airport is due to complete before the end of 2018, with biweekly flights scheduled to commence operations at the start of 2019. The facility is part of “a general plan to establish a network of airports” within Neom, including an international aviation facility. 

Speaking at the recently concluded Future Investment Initiative conference in Riyadh, Eng Nadhmi Al-Nasr, the newly appointed chief executive officer of Neom, said preparations are “progressing significantly” to begin construction work at Neom Bay, adding that the pace of development is “greater than expected”. 

The development team, he said, is “aware of the challenges” it faces in developing a megaproject such as Neom, which “will be the largest international special zone in the world in terms of size and scale of investments”. 

He continued: “However, our capabilities backed with strong political, financial and logistical support will enable us to achieve what we plan for, especially that we are dealing with a greenfield project in an untouched land.”

Addressing the audience at Future Investment Initiative to mark the first anniversary of Neom’s announcement, Al-Nasr added: “We are working hard to ensure that the newly created towns and cities in Neom will create new ways of living, economy, trade, [and] innovation that at the end will make Neom an ideal environment for all of its future residents.”

Saudi Arabia said its political and financial backing for Neom is “one of the key factors for ensuring the success” of the gigaproject. The $500bn required to develop Neom will be provided by the Saudi Arabian government, PIF, and local and international investors.

A report by state-owned SPA said Neom is reaching “an advanced stage of development”, with 16 economic sectors identified as part of the project to generate annual income worth $100bn (SAR375.2bn). 

The 16 sectors pertain to the future of energy, water, mobility, biotech, food, manufacturing, media, entertainment, culture and fashion, technology, tourism, sport, design and construction, health, education, and livability. 

READ: SAP targets Saudi's $500bn Neom smart city amid gov't discussions

HRH Prince Mohammed bin Salman bin Abdulaziz, Saudi Arabia’s Crown Prince, Vice President of the Council of Ministers, and Minister of Defense, unveiled Neom during the inaugural Future Investment Initiative conference in Riyadh on 24 October 2017.

Neom has seen major progress since its launch, with reports emerging in February 2018 that contracting heavyweight Saudi Binladin Group, led by Bakr Bin Laden, had won initial contracts to work on the project.

Al-Nasr, who formerly worked with Saudi Aramco and Kaust, was named to lead Neom this July. Months later, Yusuffali MA, founder and chairman of the UAE’s Lulu Group, said his company had plans to invest in Neom as part of its major push into Saudi Arabia. German technology company SAP also told Construction Week at Gitex 2018 in Dubai that its smart city systems could benefit Neom. SAP said it is in talks with governments to contribute to Neom, a gigaproject that sits alongside Qiddiya and Amaala in the portfolio of PIF, the sovereign wealth fund of the kingdom.

Future Investment Initiative 2018 has been a major attraction for global business leaders and dignitaries alike. Memorandums of understanding worth $50bn (SAR187.6bn) were signed on Day 1 of the summit that was held in Riyadh on 23-25 October 2018. HH Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai; Pakistan’s newly elected Prime Minister Imran Khan; and Jordan’s King Abdullah attended the conference. Besides Neom’s Al-Nasr, top bosses from Mubadala (UAE), DP World (UAE), Adnoc Group (UAE), and Russian Direct Investment Fund were lined up to speak during the conference. 



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