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Inside NEOM: Saudi’s $500bn smart megacity

Saudi city project and future tourist attraction NEOM will be its own authority

Arguably the most ambitious project taking shape in the kingdom is NEOM, a vast region in the northwest of the country that is slowly being transformed into a vision of the future.

At the heart of Crown Prince Mohammed bin Salman’s drive to diversify the country’s economy, it is being built at an estimated cost of $500 billion, covers 26,500 square kilometres, and will be powered by 100 per cent renewable energy. 

Although very little has yet been built, the joint-stock company has made a flurry of announcements over the course of the past 18 months. Both The Line, a 170-kilometre-long network of hyperconnected smart communities, and Oxagon, an industrial city featuring the world’s largest floating structure, were launched last year.

A third region, Trojena, was announced this March, as was the subsidiary Enowa, which will lead the development of NEOM’s sustainable energy and water systems. The Line alone promises to create 380,000 jobs and contribute $48 billion to the country’s GDP by 2030.

Work has already commenced on The Line, most notably its transport and logistics backbone, The Spine.

According to Brett Smythe, NEOM’s chief projects officer, early grading work for the latter has begun, with major contracts awarded to Bechtel, AECOM and the China Railway Construction Corporation.

Work has also started on Oxagon, as well as on essential support infrastructure. The latter includes a 12-square-kilometre logistics park featuring construction villages, offices, warehouses and manufacturing and distribution hubs.

These villages will initially support communities of 30,000, with that number expected to rise to over 150,000 during the next two years. At present there are 11,000 workers from 44 contractors working on site.  

Despite the announcement of various joint ventures with the likes of MBC, Volocopter and OneWeb, details relating to the value of construction contracts, completion dates and additional projects remain scant.

That said, in March NEOM stated it was due to begin construction of a $5 billion green hydrogen plant with Saudi Arabia’s ACWA Power and US-based Air Products and Chemicals.

The two companies signed a $900 million engineering, procurement and construction contract with NEOM in 2020, with the green hydrogen plant to be equally owned by the three partners. 

Last June, South Korea’s HanmiGlobal said it had won a $2.3 million project management contract for The Line.

The same month, Gulf Development International landed a $1 billion contract to build one of the largest volumetric modular assembly plants in the world. In September, NEOM invited bids for the construction of 31 kilometres of tunnels as part of The Line, while in late January Parsons Corporation said it had been selected to provide project management support for Oxagon.

In February, Van der Hoeven Horticultural Projects was awarded a design, build and operate contract for two separate horticultural test facilities covering 110,000 square metres. 

This flurry of activity can be disorientating for observers, but on the ground the reality is more modest. At present only compounds for NEOM staff, a community school, an airport and a smattering of other outposts have been built, although Smythe says large-scale permanent construction is expected to be ramped up in 2023.

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