Tue Mar 11 09:46:00 UTC 2025: ## Neom Megacity Project Plagued by Delays, Cost Overruns, and Leadership Shakeup

**RIYADH, SAUDI ARABIA** – Saudi Arabia’s ambitious $500 billion Neom megacity project, showcased recently with a lavish event attended by celebrities, is facing significant setbacks, according to a Wall Street Journal report. The project, the brainchild of Crown Prince Mohammed bin Salman, has been plagued by massive cost overruns, years-long delays, and allegations of financial manipulation.

The first phase, the Sindalah luxury resort, originally budgeted at $1.3 billion, has ballooned to nearly $4 billion and is significantly behind schedule. The absence of Crown Prince Salman from the launch event, followed weeks later by the replacement of Neom’s CEO, Nadhmi al-Nasr, further underscores the project’s troubles.

The WSJ report, citing internal documents, reveals that Neom has already consumed over $50 billion since its 2017 launch, yet its most ambitious features – including a floating city, a desert ski resort, and the iconic 170-kilometer “Line” – are far from completion. An internal audit uncovered evidence of financial manipulation by executives, allegedly aided by consultants McKinsey & Co., who used inflated projections to justify escalating costs.

A draft board presentation estimated the total cost to complete Neom by 2080 at a staggering $8.8 trillion – more than 25 times Saudi Arabia’s annual budget. Even the first phase, targeted for completion by 2035, is now projected to cost $370 billion. The Line, envisioned as two parallel skyscrapers taller than the Empire State Building, has seen its planned construction drastically scaled back due to engineering challenges and exorbitant costs. Similarly, the Trojena ski resort has experienced a $10 billion cost increase, prompting alleged manipulation of revenue projections to justify the expense.

Despite official claims that Neom will attract significant private investment, foreign direct investment in Saudi Arabia remains far below targets. Concerns about project scale, complexity, and the regulatory environment continue to deter potential investors. The International Monetary Fund has called for greater transparency in Neom’s spending. The project’s future remains uncertain as it grapples with these substantial challenges.

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