NEOM, for example, was formally launched in 2019 as a cluster of futuristic ‘smart cities’ (or ‘cognitive cities’, as per press releases). Notwithstanding some serious human rights issues (including death sentences
for tribesmen who have resisted the destruction of their historical
homeland), the project is believed to have lost several key advisers and
partners due to the fallout from the October 2018 assassination of Jamal Khashoggi, while more recently others have been leaving amidst complaints of an abusive workplace culture. As for progress, by last summer only two buildings and an airport
(the first of four) had actually been completed, with most of the
construction site remaining undeveloped. Though NEOM published an official update video
in January 2023, the only ‘real’ scenes appear to briefly depict
bulldozers digging foundations, with the remainder either relying on
indistinct satellite imagery or computer generated pictures.
Qiddiya, meanwhile, is envisaged as Saudi Arabia’s new entertainment capital and the world’s largest tourist attraction.
Located 40 km south-west of Riyadh, it is supposed to host theme parks,
hotels, residential properties, sports facilities and arenas, and arts
and cultural hubs. As with NEOM though, progress seems poor, with its
flagship motor racing circuit still incomplete (with Jeddah remaining
the site of Saudi Arabia’s Formula One Grand Prix until at least 2027).
Likewise, its ‘Six Flags’ theme park, which should have been finished
as part of phase one (in 2022), appears to be delayed, with contracts
having only been signed in December 2022.
Over the past year, nonetheless, there is definitely a renewed sense
of optimism, perhaps especially inside the country. As with other Gulf
oil producers, Saudi Arabia has been enjoying a bonanza of windfall
profits in the wake of Russia’s February 2022 invasion of Ukraine.
Notably, the national oil company’s net profit has reportedly soared by more than 46 percent, with the kingdom soon expected to post its first fiscal surplus in a decade
(of about $27 billion), and to claim growth of 8.5 percent. To some
extent certainly, this windfall seems to have boosted progress for three
other giga projects.
The Red Sea tourist complex, for example, now appears to be almost back on schedule. In 2022 several infrastructural components
were completed, including a 1.2 km bridge. Three of its hotels are
will open very soon, while the first full phase of the project is
expected to be completed in 2024,
including 16 further hotels, a marina, and an airport. Likewise, the
Roshn real estate project has managed to deliver some of its houses ahead of schedule (in Jeddah’s Alarous district), while the construction of apartments in Riyadh’s SEDRA finally began in August 2022, with land deals for
villas having since been signed. Though the Diriyah cultural and
historical development (comprising the UNESCO world heritage site
outside Riyadh) was only designated as a giga project in January 2023, credible photographs of the construction site have already been published, and dozens of key contracts have been quickly signed.
With regard to attracting foreign investment and establishing joint
ventures, 2022 has also been a turning point. Though Saudi companies
have clearly won the vast majority of the giga project tenders, dozens
of major international companies have recently committed themselves,
spanning engineering, construction, consultancy, tourism, and renewable
energy technologies. For example, the US’s Air Products and Chemicals Inc. has entered into a $5 billion joint venture with the Saudi state-backed ACWA to build a green hydrogen plant in NEOM; India’s Larsen & Toubro
has been awarded contracts for constructing a solar power plant, a wind
farm, and a battery energy storage system in NEOM; the UK’s Keller Group has won a geotechnical engineering contract at NEOM; Marriot International has agreed to operate three hotels in the Red Sea project; Greece’s Archirodon has won a marine infrastructure contract as part of the Red Sea project; the UK’s Foster and Partners has won a contract for the design of the Red Sea project’s airport; France’s Bouygues Batiment International
has entered into a joint venture with Saudi Arabia’s Almabani General
Contractors to build Qiddiya’s ‘Six Flags’ theme park; Italy’s WeBuild has won a contract to build a multi-storey car part at Diriyah; and South Korea’s HaminGlobal has won a construction management contract at Diriyah.
Though oil prices are expected to be a little lower over the next few years (at around $90 per barrel, compared to 2022’s $99 per barrel) they are nevertheless going to remain well above Saudi Arabia’s ‘breakeven price’ of about $66 per barrel. In this context, given Muhammad bin Salman’s earlier statements on the need to wean the kingdom
off the boom-bust cycle of oil profits (as opposed to simply
distributing bonuses for citizens, as per his predecessors), the
consensus is that most, if not all, of the surplus will be ploughed into
Vision2030. Thus, even if 2022’s revenues prove a one-off, it seems
possible part of the momentum can be sustained, with at least a few of
the giga projects (certainly excepting the extravagance of NEOM) now
having a chance of actually being completed by 2030.