Backed by an estimated $500 billion, the city of NEOM lies at the heart of Crown Prince and Prime Minister Mohammed bin Salman’s (MbS) initiative to modernize and reform Saudi Arabia. Envisioned as a high-tech, sustainable city of the future, the project spans about 26,000 square kilometers in the Tabuk region of northwestern Saudi Arabia, stretching to the borders of Jordan and Egypt. Some describe NEOM as Saudi Arabia’s “Dubai,” aimed at capturing the global appeal that rival Gulf cities have achieved. At the core of the project is The Line, a 170-kilometer-long, car-free urban corridor designed along a vertical axis and built to operate with zero carbon emissions. Sub-projects such as the Trojena ski resort, the Oxagon industrial city, and the Sindalah island complex will also contribute to NEOM’s multi-layered architecture. Yet despite its promise, NEOM has become as much of a problem as it is a project.
Recent developments surrounding the NEOM project suggest it has become more than a technical construction effort; it now stands at the intersection of economic and political pressures. Saudi Arabia’s Public Investment Fund (PIF) commissioning international consulting firms to conduct feasibility studies on The Line project reveals that the administration has its doubts about the project’s feasibility. Reports that the NEOM administration plans to lay off more than a thousand employees and relocate some of them to Riyadh during the same period suggest an administrative restructuring is underway.
Although NEOM was initially conceived as an economic development initiative, it has been promoted as a symbol of Saudi Arabia’s modernization ambitions because of its central role in the Vision 2030 agenda. However, recent developments centered on NEOM and other mega-giga projects show that this vision has not been realized at the same pace on the ground. The project is subject to a process shaped by technical limitations, financial pressures, and geopolitical tensions. Consequently, contrary to the grand narrative at its inception, NEOM’s current state presents a multidimensional picture of fragility.
NEOM’s internal vulnerabilities
The slowdown in NEOM’s construction reflects structural problems inherent in the project itself. Building a city of this scale in a desert climate like Saudi Arabia’s requires capabilities, technologies, and financing that go beyond traditional engineering practices. High temperatures, intense dust erosion, water scarcity, and topographical challenges have made adhering to the projected timeline difficult. In this context, the length of the 170-kilometer Line project and its originally announced population capacity reveal a clear gap between ambition and progress on the ground. Building infrastructure networks suitable for desert conditions, integrating power lines, and managing water resources sustainably have posed serious technical challenges that have not yet been fully resolved.
The financial dimension of NEOM’s vulnerabilities further complicates the project’s outlook. The PIF’s reported projection of an $8 billion loss by the end of 2024 indicates that financing sources remain limited. A lack of coordination at the management level, frequent changes in leadership positions, and slow decision-making processes are weakening the project institutionally. Progress continues partially in some sub-regions, such as Sindalah, but there are significant deviations from the planned schedule. As this table shows, NEOM’s most fundamental problems stem from internal fragilities rather than external geopolitical pressures.
The pressure of geopolitical tensions
The main tensions shaping Saudi Arabia’s neighborhood today include the Houthi crisis in Yemen, attacks on ships and tankers in the Red Sea, the conflict in Gaza prior to the ceasefire, rising regional tensions, ongoing competition with Iran, and oil price volatility. Since October 2023, the Houthis’ attacks on ships and tankers linked to Israel in the Red Sea have prompted Saudi Arabia to decide to build an alternative land trade corridor to reduce its dependence on the Red Sea route. However, this preference for a circumventing route could disadvantage NEOM’s logistics strategy in terms of time and cost.
Due to its reliance on the Red Sea coast and imported materials, NEOM is experiencing longer shipping routes, higher insurance costs, and delayed deliveries of materials and equipment resulting from Houthi attacks. These disruptions have slowed the pace of construction. To reduce its reliance on the Red Sea, Riyadh is seeking to establish an overland trade corridor, a move that could add time and production costs to both the project and the national budget.
At the same time, the ongoing conflict in Gaza and mounting regional security concerns have made foreign investors increasingly cautious, leading many to adopt a wait-and-see approach that could affect project financing. Recent developments, such as a strategic review of the Line project and a new Trojena project tender, indicate that plans are being revised against this backdrop. Ultimately, internal technical and financial constraints remain the primary challenges for NEOM, while geopolitical tensions serve as the external factors that intensify those limitations.
Concrete manifestations of the slowdown
Recent developments reveal that internal fragilities in NEOM are exacerbated by regional geopolitical pressures. The Line, the project’s symbolic core, has officially been placed under strategic review. This indicates that timetables, phases, and targets may be redefined. Similarly, the cancellation and reopening of the main tender processes for the Trojena ski resort suggest that technical and financial calculations have fallen behind initial plans. Adding to the project’s international scrutiny, Moody’s recently described the progress of Saudi Arabia’s megaprojects as “uneven,” an assessment closely watched by global investors.
During the same period, attacks carried out by the Houthis in the Red Sea have extended maritime shipping routes, increased insurance premiums for companies, and made delivery times unpredictable. The resulting slowdown in the flow of materials and equipment critical to NEOM’s construction process have directly affected the pace of construction. Additionally, information disclosed to the public about the project’s internal expenditure items has raised questions about resource prioritization. These developments demonstrate that NEOM’s slowdown is not due to one factor, but rather, a combination of internal technical and financial constraints and geopolitical pressures that create a mutually reinforcing cycle. The overall picture shows that the project is progressing in a complex arena, constrained by economic and geopolitical conditions.
The future of NEOM
When the NEOM project was first unveiled in 2017, it was designed as a development manifesto representing Saudi Arabia’s economic transformation and modernization strategy, Vision 2030. However, the project has since evolved into more than just an engineering or architectural endeavor. NEOM’s progress is shaped by a combination of internal factors — including technical capacity constraints, rising costs, and managerial vulnerabilities — and external factors such as Houthi attacks in the Red Sea, regional tensions stemming from the war in Gaza, and increasing investor caution. This geopolitical environment exerts indirect yet powerful pressure on the project, particularly through supply chain disruptions, increased insurance costs, and investment decision uncertainty.
Revising targets for high-profile subprojects, such as The Line and Trojena, reveals the tangible effects of this pressure. Thus, NEOM is evolving from a mere showcase project symbolizing economic development into a multi-layered testing ground for Saudi Arabia’s internal economic constraints and regional geopolitical tensions. This situation clearly demonstrates that the success of mega-projects depends not only on technical competence or financial capacity, but also on the political and security context in which they exist. NEOM’s future will be shaped by how these pressures are managed. The project is no longer merely a city-building strategy; it could become a strategic example testing Saudi Arabia’s geopolitical maneuvering and economic resilience.
This opinion piece was published on Nov. 14, 2025, on the Politics Today website under the headline: “Geopolitical Pressures and Internal Fragilities: The Future of NEOM”
