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KSA Mega Project Update: Neom & Red Sea

Saudi Arabia has always been a leader in infrastructural development, but its latest plan may be one of the most ambitious projects ever. The country’s King Salman has ordered his government to draw up plans for a futuristic metropolis – dubbed “Neom” by the architect behind this grand vision.

Saudi Arabia announced plans to build a new city called Neom at $500bn earlier this year. The planned city will cover an area of around 2,000 square kilometers (772 sq mi) and include skyscrapers, hotels, shopping malls, and residential areas.

The first NEOM phase will cost around $319 billion, partly funded by the wealth fund. By 2045, the project will have a capacity to house nine million. With this, Suadi aims to list its stock exchange in the world’s top three.  

The Neom megacity is expected to grow from its current size of 32,000 hectares (79,000 acres) to more than 50,000 hectares (127,000 acres), which would make it larger than New York City. It also plans to expand the existing cities of Jeddah and Madinah into urban hubs of their own.

The king commissioned a feasibility study for the project, conducted by a team of architects and engineers worldwide.

Neom is expected to become the biggest construction site in the world once complete. This ambitious plan aims to create a futuristic metropolis rivaling Dubai and Singapore.

The government first revealed its plans for Neom on January 29, 2019, and they hope to realize most of the development by 2030.

Setting up of a company named ‘neom’ in January 2019

The Kingdom has been working on developing Riyadh into one of the most important tech hubs in the Middle East, and it appears to have found a way to do it without relying too much on foreign talent. IN 2017, the government announced that it had formed a holding company named Neom. It appointed three consulting firms — McKinsey & Company, Boston Consulting Group, and Oliver Wyman—to help develop the plan.

Neom is tasked with creating a “smart city,” including everything from transportation systems to housing and entertainment options. The goal is to turn Riyadh into a major hub for technology development, attracting international companies such as Apple Inc., Amazon.com Inc., Microsoft Corp., Facebook Inc., Alphabet Inc.’s Google, and others to invest billions of dollars in the region.

Some of the hi-tech developments already underway, such as

  • Use cloud seeding technology to produce more rainfall than the natural environment in the desert.
  • One of the leading education systems where holographic teachers will hold the classes.
  • Establish the highest number of Michelin-starred restaurants per capita compared to other cities.
  • Development of Jurassic Park-like island with robotic dinosaurs to entertain tourists.
  • A giant moon illuminates NEOM’s night.
  • The mode of transportation shall be artificial taxis, and driving cars will only be meant for fun.

According to Saudi Press Agency, one phase of Neom bay is already on the verge of completion. The city is up to garner attractive investments with a mild climate and white beaches. NEOM airport is already finished and registered as an official airport. To generate media attention and attract investors’ interest, the Saudi Government is already hosting many events at the Neom site. In addition, the government has also launched a campaign to recruit more than 100,000 Saudis over the next five years to fill jobs ranging from software engineers to doctors.

Red Sea Project 

The Red Sea Project is being spearheaded by the government-backed Red Sea Development Company (RSDC). It says that it wants to attract visitors from around the world. It hopes to do this by creating a “world-class” destination that offers unique experiences such as diving, snorkeling, and sailing. As part of its push to bring in foreign tourists, the RSDC has signed agreements with Chinese companies to develop three artificial islands off the coast. These projects will cost about $1.5bn each. They will feature luxury hotels, theme parks, shopping malls, casinos, and marinas.

Saudi Arabia is pushing forward with plans to build billions worth of mega-resort along the coast of the Gulf. The project focuses on 50 resorts and comes up with 8000 hotel rooms and 1000 residential properties across six inland sites and 22 islands. It also encompasses mountain canyons, ancient culture, heritage sites, and dormant volcanoes.

With an expectation to generate 22bn riyals revenue by 2030, the project expects to create a cumulative gain of 464bn in the next 10 years starting from 2030. By 2040, it is expected to support 70,000 jobs.

What do we know about this mega project so far?

Saudi Arabia plans to launch a $500bn economic reform program dubbed ‘Vision 2030’ later this month, including creating a futuristic city to attract foreign investment.

The ambitious plan aims to wean the Kingdom off its reliance on crude oil – one of the main reasons behind the recent price crash – and transform the country into a manufacturing powerhouse.

Crown Prince Mohammed Bin Salman unveiled the scheme during his speech at the Future Investment Initiative (FII) opening ceremony, a high-profile annual summit held in Riyadh.

Mr. Bin Salman said: ‘We are launching our vision to make Saudi Arabia a global leader in technology, industry, tourism, and arts.’

The prince hoped the new city could become a model for similar projects worldwide.

The event organizers said: ‘This is the most important announcement the Kingdom has ever made regarding its future development.’

It continued: ‘The Vision 2030 program is based on three pillars; developing human resources, diversifying the economy, and building a modern civilized state.’

The Crown Prince’s speech comes after the collapse in oil prices saw the value of the Saudi riyal plunge against other currencies.

Since June last year, the currency has lost almost 34 percent of its value against the US dollar.

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