NEOM teams up on $187 million cement factories to build The Line
Saudi Arabia is taking concrete steps to accelerate construction of The Line, its planned trillion-dollar city of the future.
NEOM, which runs the project and surrounding development of the kingdom’s Red Sea coast, signed a partnership agreement with a Saudi construction company to build cement factories costing $187 million that will be used for the structure, which is planned to extend 110 miles across the desert.
The manufacturing facilities, which begin operations in November, will use carbon capture technology and a range of energy-saving innovations, NEOM CEO Nadhmi Al-Nasr told the Saudi Press Agency.
He said the deal illustrates “the critical role local partnerships play in delivering this transformational project efficiently and sustainably.”
Neom faces 20% budget cut amid continued drop in Saudi oil prices
Neom, the flagship mega-project of Saudi Crown Prince Mohammed bin Salman’s Vision 2030 economic roadmap, is facing budget cuts.
The development along the Red Sea coast is expected to be allocated 20% less than its targeted budget for this year, Bloomberg reports.
The revision comes as the kingdom reconciles lower-than-expected oil prices and foreign investment that has it on track for at least three more years of projected national budget deficits.
Saudi Finance Minister Mohammed Al-Jadaan has previously said the eight-year-old Vision 2030 plan may face delays because the kingdom needs to be careful about “overheating” the economy – which may cause inflation to rise.
“If you don’t allow your economy to catch up with your projects, basically what will happen is you’ll import a lot more,” Al-Jadaan said at the Qatar Economic Forum in May.
As a result, Saudi Arabia could lack the factories and other capacity needed to support its plans. “So giving it more time is actually wise,” he said.
Modifying the vision is not necessarily a bad sign, analysts told Bloomberg, echoing the Finance Minister’s comments. The “rightsizing” of projects is a sign the kingdom is maturing, according to Goldman Sachs’ MENA Economist, Farouk Soussa.
“What they’re doing in terms of adjusting these projects gives us a lot of comfort,” Soussa said. “They’re basically saying they’re not going to go for broke or bet the house on any one particular thing. If it’s possible, they’ll do it. If not, they won’t. They’re being quite sensible.”
Saudi Arabia pitches net-zero hotels at FII Brazil summit
As Saudi Arabia invests billions of dollars to adorn its western Red Sea coast with uber-luxe resorts, the kingdom is encouraging foreign tourists to relax on the beach secure in the knowledge that their state-of-the-art hotels are aiming for net-zero emissions.
Saudi Tourism Minister Ahmed Al-Khateeb told the 1,500 delegates attending the Future Investment Initiative Priority Summit in Brazil on Thursday that his nation is committed to sustainable tourism in its sprawling $1.5 trillion Neom mega-project, building developments that adhere to environmental best practices.
Speaking at the Copacabana Palace hotel overlooking Rio de Janeiro’s far-more-developed Atlantic coastline, Al-Khateeb laid down a welcome mat for international investors looking to sink money into the Saudi sand.
“The kingdom’s doors are open for business,” the Saudi minister said at the summit, a spin-off from the annual “Davos in the Desert” conference in Riyadh that is backed by the Public Investment Fund. “We are keen to provide a favorable environment for international investors, and the investment facilities aim to make doing business in the kingdom in the most efficient and the least expensive way.”
While home to Saudi Aramco, the world’s largest oil company, the Gulf nation is stressing its commitment to the environment at the Brazil conference. The PIF, Saudi Arabia’s sovereign wealth fund, issued a report on Thursday that highlighted the state mining company Ma’aden’s sustainability efforts, including projects for biodiversity management, vegetation improvement and the preservation of seaside mangrove tree thickets in coastal areas.
