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Coronavirus pandemic halts work on $500 billion Saudi futuristic city NEOM Open in fullscreen

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Coronavirus pandemic halts work on $500 billion Saudi futuristic city NEOM

Hopes for the bizarre $500 billion mega project are sinking [Getty]

Date of publication: 8 April, 2020

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Saudi Arabia had big plans for its flagship megaproject NEOM, but the science fiction-like idea has drifted further from reality amid the coronavirus crisis.
Work on Saudi Arabia's flagship megaproject NEOM has reportedly ground to a halt due to the coronavirus pandemic.

A Gulf-based economist told Asia Times the global crisis makes it highly unlikely the futuristic city set to be filled with flying cars and robot maids will ever see the light of day.

NEOM was supposed to be the crown jewel of Saudi Arabia's Vision 2030, a wide-reaching plan to diversify the economy and propel the ultra-conservative kingdom into the future. 

The $500 billion mega city under construction in the northwestern Tabuk province had a target of one million residents by 2030.

But as the global economy experiences an historic downturn - driving the price of the kingdom's key economic lubricant, oil, down - those hopes may be dashed.

"There's a high likelihood it fades into nothingness," the Gulf-based economist told Asia Times. "I don't see the powers that be prioritizing [NEOM] now … It's a running cost with no value added."

"The momentum will likely die out. And it will take a lot to rebuild that momentum," he added.

Bizarre details of Saudi Crown Prince Mohammad bin Salman's  plans for the futuristic desert city were revealed in July last year.

Ideas pitched to the crown prince, widely known as MbS, by Western consultants include flying taxis, robot maids and dinosaurs, and even a fake moon made with the help of NASA.

Other plans for NEOM - a portmanteau of the Greek word for "new" and the first letter of the Arabic word for "future" - included cloud seeding, genetic engineering and a beach made of glow-in-the-dark sand.

The mega city's construction included details further from science fiction, however, such as the forced displacement of 20,000 people.

Funds from the initial public offering (IPO) of Saudi state oil company Aramco were funnelled into the Public Investment Fund, which in turn was supposed to help Riyadh build NEOM and attract increased tourism and foreign investment to the kingdom.

The IPO failed to attract sufficient numbers of Western investors as hoped for by Riyadh but did see Saudi Aramco emerge as the world's most valuable company, with a listed valuation of around $2 billion.

Last month however, the company announced a 20.6 percent drop in 2019 net profit due to lower crude prices and production levels, in its first earnings announcement as a listed company amid an escalating price war.

As oil prices tumbled due to the escalating pandemic, Aramco shares have lost 29 percent from its highest point, slipping below the listing price. Aramco's market value dropped to around $1.55 trillion, but it still remains the world's largest publicly listed company.

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