Saudi Arabia's Energy Ministry will help with the $500-billion smart city project dubbed Neom to make sure it is completed on time, minister Abdulaziz bin Salman said, as quoted by Reuters, this weekend.
"We have to persevere and make all our capacities available to realise this project," bin Salman said, without providing any details as to what the support will involve.
Neom is the flagship project under the Vision 2030 strategy spearheaded by the energy minister's brother, Mohammed. The smart city, to be powered by solar and wind energy, was scheduled for completion in 2025. However, earlier this year, reports said that work on the project has stopped amid the coronavirus pandemic and plummeting oil revenues that have triggered austerity measures by the Saudi finance ministry.
The Saudi economy recorded a deficit of $29 billion for the second quarter of the year as oil revenues dropped by 45 percent, prompting spending cuts and an increase in VAT, among other steps to stabilize the economy.
In 2018, the CEO of the Neom project, Klaus Kleinfeld, told media that "The investment case for NEOM is actually very easy to make, because we've got so many things going for us," adding that there was "overwhelming" enthusiasm from investors interested in financing the project.
Since then, Kleinfeld has been replaced as chief executive of the smart city project by local Nadhmi Al-Nasr, and there has been little in the way of proof of any investor enthusiasm. The latest about the project was news about the contract with U.S. Bechtel to provide design, construction, and project management services for the project.
The plan is to make Neom a supercity, powered by renewable energy and existing as its own economic zone.
"Built from the ground up as a model of future living, NEOM will be one of the largest, most sophisticated and advanced infrastructure projects ever undertaken globally, and we are delighted to have a major industry leader like Bechtel on board to work with us to realize our ambitions," Al-Nasr said in comments on the news.
By Charles Kennedy for Oilprice.com
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