The walled city in Saudi Arabia is becoming a financial disaster — construction will take 55 years and cost $8.8 trillion

The futuristic walled city of Neom in Saudi Arabia is turning into a grandiose failure instead of an eco-friendly city of the future.

This gigantic urban experiment in the desert is facing incredible cost overruns, delays, and logistical challenges. More than $50 billion has already been spent, but most of the infrastructure remains at the planning or early construction stage.

According to an internal audit presented to Neom’s board, construction could take at least 55 years. The final cost of the project will reach $8.8 trillion, which is 25 times more than the annual budget of Saudi Arabia. The amount is absolutely unrealistic, even for a country with such resources.

According to the original plans, huge skyscrapers, a ski resort, a floating business district, artificial rivers, and hyper-modern technology were to grow in the middle of the desert. The city-wall was supposed to stretch for 170 km and be 500 meters high. But the ambition was dashed by unrealistic expectations. This project became one of the ten futuristic urban utopias.

What went wrong with the construction of Neom?

The reality is that by early 2025, only the foundation is ready. And construction companies doubt that skyscrapers can be built in this form at all.

• Costs increase many times over — for example, the first low-rise neighborhood of Sindalah was supposed to cost $1.3 billion, but ended up costing $3.9 billion
• Financial non-transparency — internal audit revealed «deliberate manipulation of» financial forecasts to justify increased costs
• Critical labor shortage — construction is slow because the region lacks sufficiently skilled workers
• Lack of infrastructure — there are insufficient roads, electricity supply, and logistics are significantly complicated
• Desert climate — weather complicates construction, and artificial water bodies require even more financial investment
• Delays and chaos — The Sindalah resort was three years late, and its opening cost $45 million. Even the golf club is not working, and there are no visitors in the restaurants

Speaking of the Sindalah luxury resort. The first part of the futuristic city was opened in October 2024. Many stars were invited to the event, including Tom Brady, Will Smith, Alicia Keys, and others. However, the Crown Prince of Saudi Arabia, Mohammed bin Salman, did not appear in person. Many took his gesture as a sign of distrust in the project’s leadership.

Sindalah was expected to be the first commercial part of Neom. But, as mentioned above, the hotel is unfinished, the golf club is closed, and the ferries could not operate due to high winds.

While Neom is in a financial crisis — there are those who make millions

The most interesting thing about this story is that there are still those who are making good money on Neom’s failure. The consulting company McKinsey & Co. receives more than $130 million annually for project planning and financial forecasts. It is noteworthy that the report identified one of the problems in construction as «deliberate manipulation» financial forecasts. But the fact remains — McKinsey & Co. receives its millions, while the megaproject itself is stuck in crisis.

Will the futuristic city-line be completed?

Neom was supposed to be Saudi Arabia’s answer to Dubai, a futuristic city that shows the power of technology and oil. But at the moment, it looks like another giant financial failure, with many billions spent without any real return. In addition, experts doubt that investors will agree to finance Neom, given its lack of transparency and problems with implementation.

Source: The Wall Street Journal