By Pesha Magid, Hadeel Al Sayegh and Federico Maccioni
RIYADH/DUBAI - Saudi Arabia has replaced the long-serving chief executive of its $500-billion megaproject Neom, a key development within the kingdom's Vision 2030 economic diversification strategy. Nadhim Al Nasr, who led Neom since 2018, will be replaced by Aiman Al Mudaifer, the company said in a statement.
Saudi Arabia has scaled back lofty ambitions for its NEOM gigaproject to prioritize completing elements essential to hosting global sporting events over the next decade as rising costs weigh, three sources told Reuters a day after the sudden departure of the project's longtime CEO.
Crown Prince Mohammed bin Salman has poured hundreds of billions of dollars into development projects through the kingdom's PIF sovereign wealth fund.
But the world's top oil exporter has had to rein in some of its ambitious plans over the past year as low oil prices and production continue to hit an economy still heavily reliant on hydrocarbon revenues.
"We're already at that stage where projects are being prioritized. So I think we've already reached that," Monica Malik, chief economist at ADCB, told Reuters.
NEOM, a Red Sea urban and industrial development nearly the size of Belgium that is due to house nearly nine million people, is central to the prince's Vision 2030 plan to create new engines of economic growth beyond oil.
The crown prince originally announced NEOM in 2017 as a 26,500-square-km (10,230-square-mile) high-tech development with several zones, including industrial and logistics areas.
One part of the project is "The Line" - which was envisioned as a 200-metre-wide series of "modules" for different urban uses sandwiched between two 500-metre-high, 170-km-long mirrored exterior facades that cut through a vast array of desert and mountains.
"When the (NEOM) project was first pitched as an idea, costs were $500 billion. However, The Line alone was going to cost over a trillion which was why it's been scaled back," one consultant with knowledge of the matter said.
The crown prince in 2022 said NEOM's first phase alone would cost 1.2 trillion riyals ($319.4 billion), half of which would come from the PIF and half from the private sector.
