By Ramanath Jha
Almost a decade ago, in 2017, Saudi Arabia’s Crown Prince Mohammed bin Salman launched plans for the country’s first futuristic, fully automated mega-development project, NEOM. The high-tech initiative was initially estimated to cost around US$ 500 billion (approximately INR 45.5 lakh crore). Given Saudi Arabia’s harsh climatic conditions, NEOM’s location was selected in the Tabuk province for its relatively milder temperatures, which typically range from winter lows of around 4°C to summer highs of approximately 39°C. The objective was to make the project more attractive to international investors, businesses, and high-net-worth individuals.
While the significant delays and cost overruns have raised questions over the project’s conceptualisation, the Saudi administration may not have fully anticipated the outbreak of the ongoing US–Israel conflict with Iran, which has since spilt over into the Gulf region. The conflict has severely disrupted global supply chains and oil supplies, while affecting regional hubs such as Dubai and Doha, with likely implications for NEOM’s future development.
The Vision Behind ‘The Line’
The most widely discussed element of the project was its centrepiece, ‘The Line’, an unconventional, zero-carbon city designed as a 170-km-long linear settlement with a width of just 200 metres, intended to accommodate nine million people. The project envisioned a high-tech urban environment with state-of-the-art infrastructure and a world-class quality of life, including advanced education, healthcare, and recreational facilities, alongside a carefully designed environmental framework. The entire development was conceived as a “no private vehicle” zone, with a free-trade regime, a distinct tax structure, and a governance model aimed at attracting an international, multicultural, and liberal population.
Infrastructure of ‘The Line’ was planned in three layers: the top level as a pedestrian layer, the first underground level as the infrastructure layer, and the lowest level as the transport layer, housing the city’s public transit system designed to traverse its length at speeds of up to 500 km per hour, enabling residents to reach any point within the city in around twenty minutes. The broader objective of the project was to diversify Saudi Arabia’s oil-dependent economy into other sectors, with a particular emphasis on real estate-led growth.
Such a futuristic settlement, with the range of technological features envisaged, was expected to require an enormous financial outlay. Moreover, as several components of the project were being introduced, there was no established on-ground proof of concept. The project was, therefore, not only ambitious but also highly audacious.
Delays, Cost Escalations, and Execution Challenges
As is often the case with large-scale megaprojects, The Line appears to have lost momentum midway, with significant delays in execution. Besides, the project stands significantly curtailed. Phase 1, currently under construction, spans a 2.4 km stretch, accounting for just 1.5 percent of the total planned length. Even this limited section is being divided into smaller, independently executable segments. The government has not made any official announcement regarding a scaled-down version of the project, nor is such a disclosure expected, given potential reputational concerns. However, fragmented reports suggest that the project’s priorities may gradually shift towards areas such as AI-driven infrastructure, including data centres. Developments in 2026 will therefore be closely watched, particularly as the year has been positioned as a period of significant progress for the project.
While this ambitious endeavour was initially launched with a budget of US$ 500 billion, ‘The Line’ and the broader NEOM initiative have reportedly experienced significant cost escalations, with some estimates placing the total at up to US$ 8 trillion. It is now understood that Saudi decision-makers are considering a considerably scaled-down version, as consultancy fees and construction costs have risen sharply. Many of the leading consultants and architects recruited from the West reportedly did not raise concerns about the constructability of several untested features. The project’s financial advisers, too, are said to have been less forthcoming about the financial viability of the grand ideas that were proposed.
Since the project depends heavily on visible, on-the-ground progress and sustained buy-in from foreign and private investors, implementation delays could weaken investor confidence in this giga-project. A more cautious approach might have drawn lessons from earlier Saudi megaprojects that were either scaled down or left incomplete. For instance, in 2017, the country announced plans to develop the world’s largest solar power project with a capacity of 200 GW, scheduled for completion by 2030; however, it did not materialise at the scale originally envisaged.
It also proposed the construction of the world’s largest hotel, Abraj Kudai, but the project encountered significant setbacks, including financial constraints and a construction accident that reportedly killed 107 people. After this, progress stalled, and its final formremains uncertain. Around 2008, Saudi Arabia entered the global skyscraper race with the announcement of the Jeddah Tower, intended to rise around 180 metres above the then-tallest building, the Burj Khalifa, and originally slated for completion by 2016; however, construction remains ongoing. In each of these cases, financial constraints emerged as a major bottleneck. These projects, along with several others, were significantly smaller in scale than ‘The Line’ and more conventional in design, yet still encountered substantial challenges.
Structural Limits of Giga-Project Design
Against the backdrop of these outcomes, the slow progress and apparent scaling down of ‘The Line’ may not be entirely surprising. Projects of this scale and ambition are less likely to be undertaken in democratic systems, where multiple stakeholders, extensive regulatory processes, competitive bidding, and institutional checks and balances often shape decision-making, alongside electoral accountability. By contrast, more centralised political systems can, in certain cases, enable faster decision-making and execution, though not necessarily without significant risks or constraints of their own.
Large-scale giga projects are often associated with highly centralised systems of decision-making. The underlying dynamics are relatively clear: authority is concentrated at the highest levels, enabling faster approvals and streamlined execution. In such contexts, fiscal and administrative capacity can be mobilised at scale, allowing significant investment to be directed towards ambitious projects, sometimes reflecting strategic signalling and long-term diversification goals alongside economic considerations. Giga projects can also function as expressions of national ambition and global positioning. Skyscrapers across the world offer a useful illustration. The Burj Khalifa, for instance, was constructed to surpass existing global benchmarks, reflecting the United Arab Emirates’ objective of building the world’s tallest structure. Notably, the uppermost 244 metres—around 29 percent of its total height—serve primarily as a spire, contributing limited functional space.
In such settings, due diligence in relation to large-scale projects—including assessments of physical feasibility, financial viability, and structured public or institutional consultation—may not always operate with the same intensity once final decisions have been taken at the highest levels. As a result, systematic debates on risks, trade-offs, and limitations may not receive sustained institutional space. In some cases, concerns over feasibility are not raised openly, particularly where there are perceived professional or organisational constraints. These dynamics can enable the incorporation of technologies that are untested or only partially validated. Certain elements of such projects appear to draw on highly speculative or science-fiction-like imaginaries, particularly in the case of NEOM and The Line.
In the absence of rigorous scrutiny of processes, technologies, and potential cost escalations, the risks associated with mega-initiatives can become more pronounced over time. Limited space for independent evaluation can, in some instances, complicate execution and recalibration, as reflected in the evolving trajectory of Saudi Arabia’s NEOM project.
Compounding these structural factors is the ongoing conflict in the wider Gulf region, which is likely to further shape investor sentiment and external perceptions of risk. Wealth holders who may have considered participation in emerging urban and investment ecosystems could reassess their positions amid heightened uncertainty. These developments may prompt Saudi decision-makers to revisit aspects of NEOM, including its scale, sequencing, and investment priorities, even if full abandonment remains unlikely. At present, a cautious reading suggests increasing uncertainty around the project’s long-term configuration.
