Rafomac News, Tech & Trends That MatterSaudi Arabia’s grand vision to build the world’s largest futuristic city, NEOM, has unraveled spectacularly after nearly a decade and $50 billion spent. What started as an audacious symbol of ambition now stands frozen, with billions wasted and construction suspended.
In 2017, Crown Prince Mohammed bin Salman unveiled NEOM—a futuristic city stretching 170 kilometres from the Red Sea into Saudi Arabia’s mountains, designed to be a marvel unlike any the world had seen. Planned to dwarf landmarks like the Empire State Building with its towering 500-metre mirrored facade and featuring everything from flying cars to zero-carbon emissions, NEOM was pitched as the ultimate city of tomorrow, with a jaw-dropping estimated cost that kept soaring, finally hitting $8.8 trillion.
Saudi Arabia poured resources into the project, backed by its vast sovereign wealth fund. They enlisted top architects, consulting giants like McKinsey and BCG, and tech visionaries such as Sam Altman and Masayoshi Son as advisors. Yet, after nearly a decade and $50 billion, 98% of the city remains a mirage—unbuilt and abandoned on paper. The Line, NEOM’s flagship project, has been scaled back drastically from 170 km to merely 2.4 km, with construction suspended indefinitely.
The dream rested on a kingdom heavily dependent on oil revenues, a classic case of the so-called ‘Dutch disease,’ where one lucrative sector stifles the development of others. Oil accounts for 55 to 60% of Saudi government revenue, a sharp contrast to Dubai’s economy, where oil constitutes just 4%. But the global shift to renewables and plummeting oil demand—forecasted to drop by 60%—exposes Saudi Arabia’s vulnerability. Oil prices fluctuating below the $90 per barrel fiscal break-even point have caused budget deficits, tightening the funding for grand projects like NEOM.
Saudi Arabia’s approach mirrored a formula tried elsewhere: build something absurdly expensive, one-of-a-kind, and iconic to drive tourism and investment. The Burj Khalifa in Dubai serves as a shining example of this tactic—despite slim direct profits, it anchored enormous urban growth. NEOM was supposed to replicate that success but on a far grander, almost fantastical scale.
The city was not a single development but a collection of audacious concepts, including Oxagon, a floating industrial platform; Trojena, an outdoor ski resort in the desert mountains; Sindalah, a luxury island resort; and Magna, home to Aquellum, an inverted skyscraper dug into a mountain. The centerpiece, The Line, was a mirrored megastructure integrating ultra-fast rail, zero streets, robot attendants, and even plans for an artificial moon.
One architecture firm suggested a practical design: a 2-km wide strip running from sea to mountains connected by rail. Saudi Arabia rejected this, insisting on an impossibly grand 170-km mirrored city. But the project’s scale defied reality. The Line would require 60% of the world’s annual green steel production and more cement than France produces yearly just for its first modules. The reflective glass facade risked dangerously heating the streets. Supplies had to come through a tiny port 80 km away, connected by a single road. The physics itself was questionable.
The financials unravelled as well. What was originally estimated at $500 billion ballooned to $1.6 trillion, then $4.5 trillion, and finally $8.8 trillion—larger than the combined GDPs of India and Japan. An internal audit leaked to The Wall Street Journal highlighted inflated revenue projections when costs surged. For instance, hotel prices in Trojena were reportedly tripled on paper to justify unrealistic returns, and McKinsey was involved in validating these rosy financial assumptions.
By 2025, the kingdom felt the pinch. The government recorded a $33.5 billion budget deficit in just the first quarter, with Aramco cutting dividends by $38 billion. Funding dried up, and whispers turned into headlines: contracts cancelled, executives fired, and the dismantling of NEOM’s grand vision. The population target for 2030 shrunk from 1.5 million to 300,000.
NEOM’s collapse offers sobering lessons. Announcements and dreams often hide the hard, unglamorous work of infrastructure, supply chains, and economics. Silencing those who deliver bad news hampers transparency and stalls realistic adjustments. And while budgets can be rebuilt, restoring credibility may take decades, if not generations. For Saudi Arabia, the dream turned nightmare serves as a cautionary tale on the limits of ambition without grounded execution.
