NEOM - Saudi Arabia's $500 Billion Bet On A Future Without Oil

The Kingdom of Saudi Arabia is situated in the furthermost part of southwestern Asia. On its eastern borders lies the Arabian Gulf, United Arab Emirates, and Qatar, the Red Sea on its west, Kuwait, Iraq, and Jordan in the north, and Yemen and Oman in the south. Its diverse topography includes coastal plains, mountains, valleys, deserts, sand hills, and lava fields. This uniquely diverse topography means that the Kingdom witnesses a varied climate in different regions. Currently, the kingdom is helmed by Saudi Arabia’s de facto ruler, crown prince, Mohammed bin Salman.

It is the crown prince’s initiative, a project named ‘NEOM’ that forms a part of the Saudi vision 2030. The project aims to diversify the country’s economy with a view to reducing its dependency on oil. Currently, the proven oil reserves within the country are the second largest in the world, corresponding to over 50 years of production at current rates.

What Is Project NEOM?
NEOM's Planned Regions
Controversies Surrounding NEOM
Conclusion

What Is Project NEOM?

The name NEOM is a portmanteau, in that its first three letters are an ancient Greek prefix – ‘neo’ means new while the fourth letter ‘M’ represents the first letter of the crown prince’s name and the first letter of the Arabic word ‘Mustaqbal’, which means ‘future’. Literally, the meaning of the word NEOM means new future.

NEOM is a planned smart city in the Tabuk Province of northwestern Saudi Arabia. A part of the Saudi Vision 2030 initiated by the crown prince, the project site is located north of the Red Sea, east of Egypt across the Gulf of Aqaba, and south of Jordan. The total area of this futuristic city is 26500 square km. NEOM’s plan includes multiple regions that include a floating industrial complex, a global trade hub, tourist resorts, and a linear city that will be powered by renewable energy sources.

Project NEOM is designed to inspire an alternate lifestyle responding to some critical global challenges facing humanity. The smart city will highlight humanity’s relationship with nature by preserving 95% of the natural environment that surrounds it. All energy in NEOM will be completely renewable generated from wind, solar, and hydrogen which will ensure a zero-emission and carbon-positive ecosystem. People involved with the project are saying that NEOM will be a regional powerhouse in water production and storage which will be anchored on water desalination. Its water infrastructure, connected through advanced technology, will ensure minimal water loss. This will put NEOM at the forefront of water technology.

The plans to build such a city were first announced at the Future Investment Initiative conference by Saudi Crown Prince Mohammed bin Salman. The conference was held in Riyadh, Saudi Arabia, on October 24, 2017. He added that the upcoming city would operate independently from the existing governmental framework and enforce its own tax, labor laws, and an autonomous judicial system.

The estimated cost of the entire project is USD 500 billion, which is largely being bankrolled by the Public Investment Fund which invests on behalf of the government of Saudi Arabia. NEOM is arguably the world’s largest and most controversial architectural project.

NEOM's Planned Regions

As per the developer, NEOM consists of 10 regions. The details of 4 such regions have been announced.

The Line

Suggestive of the name, The Line is a linear city spanning 170 km in length and 200 meters in width. The first plans for the famed city were unveiled in January 2021 and were further modified in July 2022. The original plan included multiple buildings on a linear plan. The modified plan scrapped the original idea and combined the buildings into one continuous structure with a glass mirror exterior, covering it entirely. The city will be free of cars and large enough to house 9 million residents living within walkable communities. All basic services will be available to all within a 5-minute walking distance.

Oxagon

Saudi Arabia’s Ministry of Industry and Mineral Resources, the Saudi Authority for Industrial Cities and Technology Zones, and NEOM signed a Memorandum of Understanding in December 2022, that facilitates collaboration and legislation in support of NEOM’s Future Factories Program. Initially named the NEOM Industrial City, Oxagon is a floating Industrial complex, so named due to its shape as an octagon. It is roughly spread over 250 sq. km and will focus on modern manufacturing, industrial research, and development centered on expanding the Duba port. The complex will also include a desalination plant, a hydrogen plant, and an oceanographic research center. It is the crown prince’s hope that Oxagon will become a new focal point for global trade flows and it will service shipping routes passing through the Red Sea.

Trojena

This will be the first major outdoor skiing destination in the Arabian Peninsula and it was launched on 3^rd March 2022, by Saudi Crown Prince Mohammad bin Salman. Located approximately 50 km from the Gulf of Aqaba coast in the Sarwat Mountains, the site’s elevation ranges between 1500 meters to 2600 meters and the climate is considerably cooler than the rest of the NEOM’s territory.

Sindalah

The plans for Sindalah were announced in December 2022, which will be a large luxury resort complex off the city coast. It will encompass an 86-berth marina and three luxury hotels that will be able to accommodate approximately 2400 visitors daily.

Apart from these, the announcement was also made for NEOM Bay Airport in June 2019 that would begin receiving commercial flights after the completion of the first phase of construction. The airport is registered by the International Air Transport Association (IATA). NEOM also has plans to convert almost 6500 hectares of land into agricultural fields and to rely heavily on genetically engineered crops.

Controversies Surrounding NEOM

The NEOM Project is surrounded by controversies with three main concerns – sustainability, liveability, and human rights. Although human rights have been a cause of concern in Saudi Arabia for some time, the direct concern affecting NEOM is related to the evictions that are taking place due to the construction. Roughly 20,000 tribe members of the Huwaitat tribe that is historically indigenous to the area will be relocated to accommodate the planned development.

The Line region, in particular, has been criticized for the estimated production of embodied carbon dioxide in excess of 1.8 billion tonnes. This number has been given by Philip Oldfield, head of the built environment school at the University of New South Wales. According to Oldfield any environmental benefits in the future will be overwhelmed by the carbon dioxide production due to construction. Experts are also concerned about the mirrored façade and the impact it will have on animal and birdlife.

The Crown Prince, Mohammed bin Salman commented on the liveability of The Line. He said – “It will challenge the traditional, flat, horizontal cities and create a model for nature preservation and enhanced human liveability.”  

Experts say that the liveability claims would rest on how the city is maintained.

Conclusion

As ambitious as the project sounds, there are many firms and individuals who are now involved in making this project a reality. In fact, in March 2021, NEOM signed a four-year global sponsorship agreement with the Asian Football Confederation, and in 2022 NEOM hosted Extreme E’s 2022 Desert X-Prix in Sardinia. In October of the same year, Trojena was announced as the future host of the 2029 Asian Winter Games. The world, as one, is looking forward to witnessing the reality of the project called NEOM.

FAQs

What is NEOM?

NEOM is a planned cross-border city in northwestern Saudi Arabia, which aims to create a new model for sustainable living and economic development as part of Saudi Arabia's Vision 2030.

What is the main goal of NEOM project?

NEOM aims to reduce Saudi Arabia's reliance on oil and diversify its economy. Its focus is to attract international investment and become a hub for innovation and technology.

Who is funding the NEOM project?

The NEOM project is funded by the Saudi Arabian government, through its Public Investment Fund (PIF). The PIF has committed to investing more than $500 billion over the next decade to support the development of NEOM and other projects aimed at diversifying the Saudi economy.

What is the timeline for NEOM's completion?

The initial phase of the project is expected to be completed by 2025, with some areas of the city becoming operational as early as 2023. The full development of Neom is expected to take several decades.

What are some of the futuristic technologies that NEOM plans to implement?

NEOM plans to implement several futuristic technologies, including:

1. Automated transportation systems
2. Advanced energy technologies
3. Artificial intelligence and robotics
4. Smart infrastructure
5. Vertical agriculture

These technologies are intended to make Neom a model for sustainable and innovative living, while also attracting investment and talent from around the world.