World Cup and Expo wins divert funding to Riyadh

Nojood Al Aqeel/Unsplash

• Big events ‘never in plan’ for 2030
• Other giga-projects relegated
• ‘Infrastructure needs to be tripled’

Saudi Arabia’s giga-projects have slowed down because of financing constraints – and now the government’s unexpected success in bidding for global events is redirecting even more resources towards Riyadh. 

Even prestigious developments such as Neom, the $500 billion futuristic city in north-west Saudi Arabia, are taking second place. The priority is turning the capital into a global city ahead of two major events that were not in the original Vision 2030 document. 

Riyadh was chosen as the site for the World Expo 2030 last November and this year Fifa is set to declare formally that the kingdom will host the World Cup in 2034. 

“The World Cup and World Expo were never in the plan. All of a sudden you wake up and find you have these wins,” says Turab Saleem, Saudi hospitality analyst at real estate consultancy Knight Frank.

“So, all the money has to go to Riyadh. Anything there is going to happen. It’s the best chance to show their muscle.” 

• Riyadh Expo 2030 to spur giga-project construction
• Saudi Arabia’s World Cup bid outlines 11 new stadiums
• Giga-project slowdown to hit Riyadh population growth

The initial goal of 28 million visitors to the Expo has been increased to 40 million – and comes with its own cost of $7.8 billion that was not factored into the original Vision 2030 strategy

Saudi Arabia’s World Cup bid is centred on five cities, led by Riyadh. The authorities plan to build 11 football stadiums for the tournament, for an undisclosed amount. 

The capital’s population is forecast to rise to 9.2 million by 2030 and the government is racing to complete infrastructure projects including a metro system and improved roads. It is spending $5 billion in hopes of reducing traffic jams and the city’s above-average accident rate. 

“They need the Riyadh projects for around 40 million people that could come to Expo, so the infrastructure needs to be tripled to host all these people,” Saleem says. 

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This puts extra pressure on Riyadh’s giga-projects to be completed on time. The city has three major developments: the historic district of Diriyah, valued at $64 billion, New Murabba at $50 billion and Qiddiya sports city, whose estimated costs have more than doubled in the past year from $9.8 billion to $21.8 billion. 

Diriyah and Qiddiya have piled huge amounts of money into completion, with $29.6 and $17 billion of the work respectively in the pipeline – but for the New Murabba district the figure is only $7.1 billion. 

New Murabba’s CEO Michael Dyke said last week that the giga-project’s centrepiece would be ready by December 31 2030, two months after the Expo starts in October. 

Another Riyadh development with an estimated cost of $20 billion, called the North Pole, has not begun work yet. But it is rumoured to include a tower called the Rise that could become the world’s tallest. By contrast, half the $10.4 billion King Salman Park project has already been commissioned.

In a recent report, S&P analyst Zahabia Gupta says the government is expected to keep recalibrating projects and timelines in order to meet the huge costs, which have forced the Public Investment Fund to raise debt and sell some US stock holdings.

Emon Shakoor, founder and CEO of Blossom Accelerator, says the focus on Riyadh is inevitable until 2030 and will pay off in the long run. 

“The concentration on Riyadh is necessary. It is definitely the New York of the Middle East – and Washington as well. It’s pivotal,” she says, referring to the number of startups in the capital’s tech zones. 

“But after 2030 and meeting key objectives, we’ll see this waterfall effect on other cities.”