Saudi Arabia is reviewing some of its ambitious megaprojects. “Vision 2030” of the kingdom envisages several large-scale construction projects, including the futuristic megacity and entertainment city of Neom on the outskirts of Riyadh.
Rumours are growing that Saudi Arabia is struggling to bear the financial burden of its massive plans. An adviser close to the government recently told the BBC that some projects are currently being reviewed. Accordingly, there may be delays.
„The decision will depend on several factors, but there is no doubt that there will be a review. Some projects will continue as planned, but others may be delayed or affected by layoffs,” the source added.
In April, the kingdom's finance minister said it was necessary to adjust some aspects of the Vision 2030 plan, which includes Neom, due to the emergence of a number of “challenges”.
Addressing a meeting of the World Economic Forum in Riyadh, Mohammed Al-Jadan said the country would “change course” and will make “corrections”. “We will reduce some projects and speed up other projects,” said the finance minister during a session on global economic growth.
Amine Matti, the IMF's deputy director and head of mission in Saudi Arabia, told the Financial Times that Saudi authorities are “recalibrating” the projects in order to better assess whether some costs should be postponed.
Publicly, Saudi Arabia has largely insisted that the megaprojects, especially Neom, are a top priority. Earlier this year, the Kingdom's Minister of Economy and Planning told CNBC that the scope of the project “has not changed” despite media reports to the contrary.
Saudi Arabia is struggling to attract the foreign investment needed to develop the country. Lower oil prices have also affected government finances, which appears to be forcing the Saudis to look for new sources of income.
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