Geopolitical Pressures and Internal Fragilities: The Future of NEOM
It is evident that NEOM has become as much of a problem to Saudi Arabia as it is a project.
People watch a video on a large screen showcasing Trojena, a mountain tourism destination under construction in Neom in Saudi Arabia as they visit visit Saudi Arabia Pavilion at the 2025 World Exposition in Osaka, Kansai, Japan, on May 7, 2025. Photo by Anadolu Images.
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t a cost of $500 billion, the city of NEOM lies at the heart of Crown Prince and Prime Minister Mohammed bin Salman’s (MbS) initiative to modernize and reform Saudi Arabia. The project, which covers an area of 26,000 square kilometers, is being developed in Tabuk, in northwestern Saudi Arabia, and will extend to the borders of Jordan and Egypt. According to some, NEOM will become Saudi Arabia’s “Dubai” and capture the appeal that regional rivals have gained from their cities. At the core of the project is The Line, a 170-kilometer-long, car-free, vertical-axis city designed to have zero carbon emissions. Sub-projects such as the Trojena ski resort, the Oxagon industrial city, and the Sindalah island complex will also contribute to NEOM’s multi-layered architecture. However, it is evident that NEOM has become as much of a problem as it is a project.
Recent developments concerning the NEOM project that have come to public attention indicate that the project is evolving into more than just a technical construction process; it is also at the center of economic and political pressures. Saudi Arabia’s Public Investment Fund (PIF) commissioning international consulting firms to conduct feasibility studies on The Line project reveals that the administration has its doubts about the project’s feasibility. Reports that the NEOM administration plans to lay off more than a thousand employees and relocate some of them to Riyadh during the same period suggest an administrative restructuring is underway.
Although NEOM was initially conceived as an economic development initiative, it was marketed as a symbol of Saudi Arabia’s modernization aspirations due to its central role in the 2030 Vision. However, recent developments centered on NEOM and other mega-giga projects show that this vision has not been realized at the same pace on the ground. The project is subject to a process shaped by technical limitations, financial pressures, and geopolitical tensions. Consequently, contrary to the grand narrative at its inception, NEOM’s current situation has become a multidimensional picture of fragility.
NEOM’s internal vulnerabilities
The loss of momentum in NEOM’s ongoing construction process is due to structural problems inherent to the project itself. Building a city of this scale in a desert climate like Saudi Arabia’s requires capabilities, technologies, and financing that go beyond traditional engineering practices. High temperatures, intense dust erosion, water scarcity, and topographical challenges have made adhering to the projected timeline difficult. In this context, the length of the 170-kilometer Line project and its planned population capacity, as initially announced, show a significant mismatch with the progress achieved on the ground. Building infrastructure networks suitable for desert conditions, integrating power lines, and managing water resources sustainably have posed serious technical challenges that have not yet been fully resolved.
The financial aspect of NEOM’s vulnerabilities exacerbates the situation. The Public Investment Fund’s (PIF) announcement of an estimated $8 billion loss by the end of 2024 suggests that financing sources are limited. A lack of coordination at the management level, frequent changes in leadership positions, and slow decision-making processes are weakening the project institutionally. Progress continues partially in some sub-regions, such as Sindalah, but there are significant deviations from the planned schedule. As this table shows, NEOM’s most fundamental problems stem from internal fragilities rather than external geopolitical pressures.
The pressure of geopolitical tensions
The main tensions shaping Saudi Arabia’s neighborhood today include the Houthi crisis in Yemen, attacks on ships and tankers in the Red Sea, the conflict in Gaza prior to the ceasefire, rising regional tensions, ongoing competition with Iran, and oil price volatility. Since October 2023, the Houthis’ attacks on ships and tankers linked to Israel in the Red Sea have prompted Saudi Arabia to decide to build an alternative land trade corridor to reduce its dependence on the Red Sea route. However, this preference for a circumventing route could disadvantage NEOM’s logistics strategy in terms of time and cost.
Due to its reliance on the Red Sea coast and imported materials, NEOM is experiencing longer shipping routes, higher insurance costs, and delayed deliveries of materials and equipment due to Houthi attacks. This has been observed to slow down the pace of construction. To reduce its dependence on the Red Sea, Riyadh is attempting to establish a land trade corridor, which could impose additional time and production cost burdens on the project and the Saudi budget.
The ongoing conflict in Gaza and growing security concerns are heightening caution among foreign investors, who are adopting a wait-and-see approach that could disrupt project financing. Recent developments, such as a strategic review of the Line project and a new Trojena project tender, indicate that plans are being revised against this backdrop. Therefore, internal technical and financial constraints remain decisive for NEOM, while geopolitical tensions form the external framework that narrows these constraints.
Concrete manifestations of the slowdown
Recent developments reveal that internal fragilities in NEOM are exacerbated by regional geopolitical pressures. The Line, the project’s symbolic core, has officially been placed under strategic review. This indicates that timetables, phases, and targets may be redefined. Similarly, the cancellation and reopening of the main tender processes for the Trojena ski resort suggest that technical and financial calculations have fallen behind initial plans. Another factor contributing to the international visibility of this situation is the assessment by Moody’s. The international credit rating agency has described the progress of Saudi Arabia’s megaprojects as “uneven,” a finding closely monitored by investment circles.
During the same period, attacks carried out by the Houthis in the Red Sea have extended maritime shipping routes, increased insurance premiums for companies, and made delivery times unpredictable. The resulting slowdown in the flow of materials and equipment critical to NEOM’s construction process has directly affected the pace of construction. Additionally, information disclosed to the public about the project’s internal expenditure items has raised questions about resource prioritization. These developments demonstrate that NEOM’s slowdown is not due to one factor, but rather, a combination of internal technical and financial constraints and geopolitical pressures that create a mutually reinforcing cycle. The overall picture shows that the project is progressing in a complex arena, constrained by economic and geopolitical conditions.
The future of NEOM
When the NEOM project was first unveiled in 2017, it was designed as a development manifesto representing Saudi Arabia’s economic transformation and modernization strategy, Vision 2030. However, the project has since evolved into more than just an engineering or architectural endeavor. NEOM’s progress is shaped by an intersection of internal factors, such as technical capacity constraints, rising cost pressures, and managerial vulnerabilities, and external factors, such as Houthi attacks in the Red Sea, regional tensions arising from the war in Gaza, and a growing cautious stance among investors. This geopolitical environment exerts indirect yet powerful pressure on the project, particularly through supply chain disruptions, increased insurance costs, and investment decision uncertainty.
Revising targets for high-profile subprojects, such as The Line and Trojena, reveals the tangible effects of this pressure. Thus, NEOM is evolving from a mere showcase project symbolizing economic development into a multi-layered testing ground for Saudi Arabia’s internal economic constraints and regional geopolitical tensions. This situation clearly demonstrates that the success of mega-projects depends not only on technical competence or financial capacity, but also on the political and security context in which they exist. NEOM’s future will be shaped by how these pressures are managed. The project is no longer just a city-building strategy, but rather, it could become a strategic example that tests Saudi Arabia’s geopolitical maneuvering space and economic resilience.
(Originally published in Turkish by Kriter)
