A new WSJ report suggests that Saudi Arabiaโs now eight-year-old Neom project โ a futuristic, carbon-neutral, 105-mile-long linear city envisioned by Crown Prince Mohammed bin Salman โ has become a financial sinkhole.
Plagued by delays and cost overruns, the country, which has already shelled out $50 billion, could reportedly face another 55 years of construction, with an astonishing projected cost of $8.8 trillion, according to an internal audit presented to Neomโs board last summer. Thatโs more than 25 times Saudi Arabiaโs annual budget, notes the Journal.
The situation is starting to resemble Saudi Arabiaโs own Waterloo, with MBS misjudging the monumental challenges inherent in his strategy, much like Napoleon did before him. Among the harsh realities threatening to derail the project are insufficient labor, inadequate roads, and a lack of electricity.
There are some winners, however. Consulting giant McKinsey & Company is reportedly earning more than $130 million annually for its services, despite some controversy surround its role, given the firmโs involvement in both the planning and validation of some of the projectโs financial projections, per the story. A McKinsey spokesman tells the WSJ the firm has โstrict protocols to prevent conflicts of interest in our engagements.โ
