Saudi Arabia hits reset on NEOM: Did costs for ‘The Line’ spiral out of control?

Dubai: Saudi Arabia is officially reassessing its $500 billion NEOM mega-city, with its most iconic component—‘The Line’—now under a strategic review. The move, confirmed by NEOM, has sparked renewed scrutiny over whether the costs and complexity of the futuristic project are spiraling beyond control.

NEOM described the strategic checks as “common practice” for long-term developments, but the timing of the announcement coincides with growing reports of budget strain and operational slowdowns across the kingdom’s Vision 2030 infrastructure program.

According to Bloomberg, the Public Investment Fund (PIF), which backs NEOM, has hired external consultants to assess the viability of the linear city. While the exact scope of the review has not been disclosed, industry experts suggest it likely includes evaluations of technical feasibility, financing options, and projected economic impact.

In a separate development reported by Semafor, NEOM is preparing to lay off a significant portion of its workforce and relocate more than 1,000 employees from the remote construction site to Riyadh. The planned move marks a reversal of a prior policy under former CEO Nadhmi Al-Nasr, who had mandated that staff remain based at the site itself.

Employees moved to the capital are expected to lose on-site benefits such as housing and meals, effectively resulting in a pay cut, according to people familiar with the matter who spoke to Semafor.

The scope and timeline of The Line are also reportedly being scaled back. CNBC, citing sources close to the project, reported that development has been frozen on large sections of The Line, with the number of active construction workers cut by 35% since April 2025.

The report attributed the cutbacks to a wider liquidity crunch that has hit Vision 2030 projects, prompting government agencies to prioritise financial stability over rapid expansion. Vendors have reportedly faced delayed payments, and capital originally earmarked for energy-sector projects is being reallocated.

One of the affected sub-projects could be Oxagon’s green hydrogen facility, which is 80% complete and jointly developed by Air Products, ACWA Power, and NEOM. Though still progressing, CNBC sources suggest that financial pressures are increasingly affecting NEOM’s ability to maintain its ambitious timelines.

Perhaps the most eye-catching development is the estimated final cost of NEOM. According to an internal report seen by The Wall Street Journal, the total price tag has now ballooned to $8.8 trillion—a staggering leap from the original $500 billion projection.

The WSJ report also revealed that the project is now expected to reach its so-called “end-state” by 2080. The first phase, expected to cost $370 billion, may only be completed by 2035.

The dramatic increase in costs and delay in timelines is likely to place even greater pressure on Saudi Arabia to attract private investment—something the government has repeatedly stated it is banking on to complete the futuristic city.

Also per Bloomberg, Saudi officials have scaled down some of NEOM’s most ambitious targets. Instead of 170 kilometres of linear development, only 2.4 kilometres of The Line are expected to be built by 2030. The targeted population figure for the same year has also been reduced from 1.5 million to just 300,000.

Despite the downsizing, Saudi authorities still maintain that The Line will eventually span 100 kilometres and remain a centrepiece of the NEOM vision.

The project, personally championed by Crown Prince Mohammed bin Salman, remains a key pillar of the kingdom’s plan to diversify away from oil through technology, tourism, and innovation. But as the reassessment continues and fiscal constraints mount, NEOM’s evolution may no longer mirror the sci-fi blueprint initially envisioned.

Instead, it could unfold as a much more gradual—and costly—experiment in urban design.