Saudi Arabia’s economy minister dismissed recent reports that the kingdom’s $1.5 trillion NEOM megaproject, a futuristic desert project on the Red Sea coast, is scaling back some of its plans.
“All projects are progressing at full speed,” Faisal Al Ibrahim told CNBC’s Dan Murphy at the World Economic Forum’s special meeting in Riyadh on Monday.
“We set out to do something unprecedented, and we are doing something unprecedented, and we will deliver something unprecedented.”
In early April, reports surfaced in Western media that The Line project, a planned glass-walled city planned to stretch 105 miles through the desert by 2030, would be just 1.5 miles long at that point – a reduction of 1.5 miles 98.6%. . Citing anonymous sources with knowledge of the matter, Bloomberg’s initial report said the Saudi government’s original plan to have 1.5 million people living in The Line by 2030 has been cut to 300,000.
The alleged scaling back of plans, at least in the medium term, comes amid well-known concerns about the finances of NEOM, which is part of the kingdom’s broader Vision 2030 initiative to diversify its economy away from oil. According to Bloomberg’s report, Saudi Arabia’s sovereign wealth fund, the Public Investment Fund, has not yet approved NEOM’s 2024 budget.
Al Ibrahim stressed that the projects would be implemented as planned, but with the caveat that decisions would be made with “optimal economic impact in mind.”
“We are seeing feedback from the market, we are seeing more interest from investors and we will always prioritize where we can achieve optimal economic impact,” he said.
“Today the kingdom’s economy is growing faster, but we don’t want to overheat it. We don’t want to realize these projects at the price of importing too much against our own interest. We will continue to deliver these projects in a manner that meets these priorities, implements these projects and has the optimal healthy impact on our economy and the … healthy non-oil growth within it.”
NEOM political map of Saudi Arabia’s $500 billion megacity project along the Red Sea coast. Location of the smart and tourist city with an autonomous justice system. English caption. Vector.
Peterhermesfurian | Istock | Getty Images
Nevertheless, the minister emphasized that “for NEOM, the projects, the planned scope continues as planned. There is no change in scope.”
“It is a long-term project that is modular,” he said. “The remaining megaprojects are designed to achieve specific impacts in specific sectors.”
When asked what kind of message the reported time frame and size changes would send to private investors, Al Ibrahim said that decisions would be made according to the needs and returns of the projects and that all developments within NEOM are attracting growing investor interest.
“Remember that these sectors did not exist in the past. They are rebuilt from the ground up. They require some investment and a major commitment from the government and the sovereign wealth fund,” he said.
“And we are seeing increasing investor interest in all of these projects. These projects will be implemented at a scale and in a manner that reflects the needs of the projects in terms of priorities, the returns from those projects and the economic impact.” It is like minimizing leakage while also minimizing the risk of overheating minimize.”
Source link
2024-04-29 15:01:33
www.cnbc.com
