PIF merges companies in sign of giga-project shake-up

Saudi Royal Court/Handout via Reuters

• Qiddiya to absorb entertainment company
• Giga-projects under pressure
• 21 remote destinations planned

The Saudi sports and leisure city Qiddiya said on Tuesday it would absorb the entertainment company Seven.

It is the first sign of a possible shake-up of Public Investment Fund giga-projects as they struggle to meet deadlines amid rising costs and budget deficits. 

Doubts have arisen about the future of some of the projects after the government said in December some could be subject to delays and Neom revealed in March that its 170km-long horizontal city The Line would open in 2030 at less than 5km.

The Saudi economy contracted 0.8 percent in 2023 and now faces three years of budget deficits as oil output cuts struggle to push oil prices close to Saudi Arabia’s breakeven oil price. 

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“By joining the Qiddiya Investment Company, Seven will support the aims of the [Qiddiya] Group in developing the concept of amusements,” a statement on the Saudi Press Agency said, without giving further reason for the move. 

PIF did not respond to a request for comment. 

Seven, which is owned by PIF, is planning to open the first of 21 destinations next year as part of its mandate to build entertainment complexes in remote corners of the country. A senior executive said in January that no decision had even been taken on what to call the parks. 

But Qiddiya, also owned by PIF, is the more expensive and prestigious project, valued by the real estate consultancy Knight Frank at $9.8 billion. It includes a sports stadium that will need to be ready for Saudi Arabia’s hosting of the 2034 football World Cup. 

The sports and entertainment city, 25 miles south-west of Riyadh, is planned to become a suburb of the capital, a Gulf Arab “Disney World” attracting 48 million visitors annually with the help of a direct metro link to Riyadh airport. 

The blockbuster Dragon Ball franchise said in March it would build a theme park inside Qiddiya recreating locations from the original print and television cartoon series. 

• Largest water park in Middle East to open in Qiddiya next year
• Neom announces superyacht resort on Gulf of Aqaba
• Qiddiya’s new racetrack bids for world motorsports crown

The Saudi finance minister, Mohammed Al-Jadaan, said that global economic and regional geopolitical shocks had given Saudi Arabia a chance to reassess and replan the giga-projects.

Crown Prince Mohammed bin Sultan has already talked of extending the current economic transformation plan from 2030 to 2040. 

“All of these collective shocks that are facing the world call us also to reprioritise and see what we are doing and optimise what we are doing,” Al-Jadaan said at a forum in Doha this week. 

“If you don’t allow your economy to catch up to your projects, you’ll import a lot more, and you’ll not allow your private sector to catch up and build factories to support the projects you’re building.

“So giving it more time is wise, and scaling it so they build on each other.”