Cailian Press, July 15th (Editor Zhao Hao)
It is reported that Saudi Arabia has requested several consulting firms to conduct a strategic review of its “The Line” project to assess the priority order for project-related expenditures.
The The Line is one of the most anticipated urban design schemes in the future New City (NEOM) of Saudi Arabia: it is only 200 meters wide and 170 kilometers long, covering an area of only 34 square kilometers, with the ultimate goal of housing 9 million residents and utilizing 100% renewable energy.
A source close to the sovereign wealth fund of Saudi Arabia revealed that a department within the fund has asked consulting firms to evaluate the feasibility of the plan and propose possible modifications.
The source noted that the government might ultimately decide to proceed with the project as planned. Any changes would require approval from the senior management of the Public Investment Fund (PIF) and the government.
In a statement, NEOM Company stated: “For such large-scale, multi-year development projects or infrastructure plans, conducting a strategic review is a common practice that may be repeated.”
NEOM emphasized that “The Line remains a strategic focus for NEOM, with our focus on ensuring operational continuity, efficiency, and accelerating progress towards achieving the overall vision and objectives of the project.”
This review was initiated shortly after Aiman Al-Mudaifer took over as the new CEO of NEOM. Some insiders mentioned that one of the key goals of this assessment was to explore commercialization paths.
Analysts believe this highlights Saudi Arabia’s ongoing adjustments to its economic transformation projects under its “Vision 2030” framework. With falling oil prices, foreign investment below expectations, and budget deficits, Saudi Arabia must reassess its priorities and pace of implementation.
Current Brent crude oil prices are around $71 per barrel, putting pressure on Saudi finances. It is estimated that Saudi Arabia needs a price of $96 per barrel to achieve budget balance.
Another development project of NEOM, “Sindalah,” also faces challenges. Launched last year, the project focuses on high-end tourism but remains stalled to date. Some insiders mentioned issues related to design flaws.
The The Line is one of the flagship projects in Saudi Crown Prince’s $2 trillion “post-oil era” transformation plan, which has been highly anticipated since its announcement in 2017 due to its massive construction scale.
However, there were reports last year that the project had been scaled back, with the government expecting fewer than 300,000 people to reside by 2030. Currently, there is almost no habitation at the site, with only construction workers present.
Investors have long called for rational adjustments to these “superprojects.” The International Monetary Fund (IMF) also expressed support in its latest assessment of Saudi Arabia, welcoming the government’s initiation of a new round of expenditure reviews.