Monday 10th May 2021

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  • Saudi prince plans mega city backed by $500b investments

    24 October Dubai (UAE) -Called ‘NEOM’, the new city will be built on Saudi Arabia’s Red Sea coast, stretching into Jordan and Egypt

    Riyadh, Dubai: Crown Prince Mohammad Bin Salman announced plans to build a new city on the Red Sea coast, promising a lifestyle not available in today’s Saudi Arabia as he seeks to remake the kingdom in a time of dwindling resources.

    The prince said the city project, to be called “NEOM,” will operate independently from the “existing governmental framework” with investors and businesses consulted at every step during development.

    The project will be backed by more than $500 billion from the Saudi government, the country’s sovereign wealth fund and local and international investors, according to a statement released on Tuesday at an international business conference in Riyadh.

    The ambitious plan includes a bridge spanning the Red Sea, connecting the proposed city to Egypt and the rest of Africa. Some 10,000 square miles (25,900 square kilometers) have been allocated for the development of the urban area that will stretch into Jordan and Egypt, creating “the world’s first independent special zone stretching over three countries.”

    A bridge connecting Saudi Arabia with Egypt was announced during a visit to Cairo last year by King Salman.

    “NEOM is situated on one of the world’s most prominent economic arteries, through which nearly a tenth of the world’s trade flows,” Prince Mohammad said. “Its strategic location will also facilitate the zone’s rapid emergence as a global hub.”

    Prince Mohammad is spearheading efforts to prepare Saudi Arabia for the post-oil era. In the course of his meteoric rise to power since 2015, he’s revealed plans to sell a stake in oil giant Saudi Aramco and create the world’s largest sovereign wealth fund, and has ended some social constraints, including a long-standing ban on female drivers.

    “NEOM will be constructed from the ground-up, on greenfield sites, allowing it a unique opportunity to be distinguished from all other places that have been developed and constructed over hundreds of years,” Prince Mohammad said in the statement.

    The plan will likely be met with the same mixture of optimism and doubt that has greeted his previous headline-grabbing announcements. His supporters can be expected to cheer what they see as a bold drive to transform the kingdom, while others will point to past failed attempts to overhaul the Saudi economy that also included industrial cities in the desert.

    Klaus Kleinfeld, the former chairman and chief executive officer of Siemens AG and Alcoa Inc., was appointed to lead the development of NEOM.

    The project “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,” said Steffen Hertog, a professor at the London School of Economics and longtime Saudi-watcher.

    The city will focus on nine industries: energy and water, mobility, biotech, food, technological and digital sciences, advanced manufacturing, media and entertainment, according to the statement. “The focus on these sectors will stimulate economic growth and diversification.”

    BOX – SoftBank to work with Saudi Arabia on new city

    RIYADH: SoftBank Group Corp will work with Saudi Arabia on the development of “Neom”, a new business and industrial city announced on Tuesday. Softbank Group CEO Masayoshi Son said at an investment conference in Riyadh on Tuesday that Saudi Arabia’s Crown Prince Mohammad Bin Salman had asked him to get involved. “I think Neom is a fantastic opportunity,” Son said, adding that the SoftBank Vision Fund would invest in Saudi Electricity Co (SEC).

    -Reuters

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