RYADH, 22 June. - (ANA) - Saudi authorities expect to spend $16 billion canceling contracts at NEOM over the next five years, according to people familiar with the matter. That is more than the $8 billion earmarked for construction work that is still going ahead on the project over the same period. The gigaproject was, at one point, a key part of the kingdom’s plan to diversify its economy from oil, but the government is now shifting its investment focus to sectors such as AI, defense, and logistics.

 

The kingdom has been trimming back some of its most ambitious plans as it tries to cut costs amid budget deficits and foreign investment that has been weaker than hoped. The projected cancellation costs for elements of NEOM like The Line — a pair of mirrored skyscrapers running from the coast 170 kilometers into the desert that were expected to cost more than $1 trillion — are equal to more than a third of the government’s projected 2026 budget deficit.

 

The kingdom has spent $64 billion on NEOM so far, the people said, yet has little to show for it other than parts of the industrial city OXAGON, where the port has become an important node for bringing in goods during the Iran war and the effective closure of the Strait of Hormuz. - (ANA) -

 

AB/ANA/22 June 2026 - - -