Saudi Arabia is moving to trim its high-profile Neom development after an internal review of the kingdom's large-scale projects. Officials announced changes that will scale back prominent components of Neom, with The Line and Trojena - a planned ski resort - specifically identified as being affected.
As a direct consequence of the decision to reduce the scope of these developments, Saudi Arabia has postponed its plans to host the Asian Winter Games originally scheduled for 2029.
Observers characterize the action as part of a wider reassessment of the country's ambitious development agenda. Analysts at Capital Economics described the step as unsurprising, noting that it follows a period in which officials had repeatedly suggested the scale and scope of the gigaprojects were under review. In the firm's words, "none of this is a major surprise."
Capital Economics further pointed to the economic context influencing the decision. The analysts said that the "backdrop of low oil prices appears to be forcing their hand," indicating that the prevailing energy price environment has played a role in prompting the reassessment and subsequent downsizing.
The move signals a change in approach to some of the most visible elements of Saudi Arabia's development plans. While the specifics of how The Line and Trojena will be altered were not elaborated in detail, the announcement confirms a concrete scaling back and the postponement of an international sporting event tied to those plans.
Key takeaways
- Neom development will be significantly reduced following a national review.
- The Line and Trojena ski resort are among the elements set to be scaled back.
- Saudi Arabia has postponed hosting the Asian Winter Games that had been planned for 2029.
Context from analysts
- Capital Economics said the move was not unexpected, noting officials had signaled reassessment of gigaprojects in recent years.
- The same analysts highlighted low oil prices as a motivating factor, saying the "backdrop of low oil prices appears to be forcing their hand."
Impacted sectors
- Construction and infrastructure - as major projects are scaled back.
- Tourism and events - reflected by the postponement of the Asian Winter Games.
- Energy markets - referenced indirectly through the role of oil prices in the decision.