The Saudi Arabian government has announced plans to build a 10,000-square-mile megacity called NEOM on the coast of the Red Sea, covering an area three times the size of New York City. The announcement was made by Crown Prince and First Deputy Prime Minister Mohammed bin Salman on Tuesday at an international business conference in Riyadh.
More than $500 billion has already been pledged in support of the project by the Saudi government, its Public Investment Fund (PIF), and local and international investors. The developer behind the project is Klaus Kleinfeld, former chairman and CEO of industrial manufacturing company Siemens AG, and Alcoa, of the world’s largest aluminum producers.
NEOM represents the Crown Prince’s latest move to prepare Saudi Arabia for the post-oil era. In the past two years alone, he has revealed plans to sell a stake in Saudi Aramco, the world’s second largest daily oil producer, and created a sovereign wealth fund (PIF) to aid in the transition to a post-oil economy.
Prince Mohammed has pitched NEOM as part of a “new generation of cities,” a departure from the kingdom’s existing urban landscape. In Tuesday’s announcement, he outlined some of NEOM’s features: the city will be free to operate outside of governmental regulations. The city, designated in an area near Saudi Arabia’s northeast border with Egypt and Jordan, will rely entirely on wind and solar energy. All transportation within the city will be automated, and plans call for the construction of a massive bridge over the Red Sea to the Sinai Peninsula of Egypt.
A publicity video for NEOM depicts a tech and manufacturing hub with considerably different social mores than other Saudi cities—for instance, the video shows women jogging in leotards in public spaces and working alongside men. (The crown prince has described his wish for a return to “moderate Islam” in Saudia Arabia.)
Steffen Hertog, a professor at the London School of Economics, told Bloomberg that NEOM “seems to be broadly modeled on the ‘free zone’ concept pioneered in Dubai, where such zones are not only exempt from tariffs but also have their own regulations and laws, hence operating separately from the rest of government.”
Previous mega-projects launched by the Saudi Arabian government have failed to flourish once oil prices rose. The crown prince vowed to commit to this project regardless of those fluctuations. The first phase of the project is slated to be completed by 2025.
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