meed-logo

line1 line2 line3
SIGN IN / REGISTER

Neom becomes real-world building project

26 April 2023

This package on Neom also includes:

> SITE REPORT: World’s largest piling project shifts to The Line’s marina
> INTERVIEW: Neom to fix construction
> MOVIE SET: Neom advances plans to be leading movie destination
> TUNNELS: Neom tenders Delta Junction tunnel contracts
> OXAGON: Work to start for $1.5bn Oxagon wind turbine plant

 

The launch of Neom by Saudi Arabia’s Crown Prince Mohammed bin Salman at the Future Investment Initiative (IFI) in Riyadh in October 2017 challenged the world’s imagination and marked the beginning of Saudi Arabia’s gigaprojects era.

Strategically located close to neighbouring Jordan and Egypt, the 26,500 square-kilometre project is about the size of Belgium.  With a $500bn price tag, it quickly became known as the world’s largest construction project.

In the six years that followed, there has been a steady wave of announcements detailing the individual components of Neom. Each launch has been accompanied by marketing campaigns showcasing slick computer-generated imagery (CGI) of futuristic cities that aim to change how mankind will live. 

Unless working on these projects directly, Neom has been an abstract idea for most people. That started to change in January when Neom released a progress video of construction work on Sindalah Island, which is due to open its doors in 2024. Then in March, MEED visited Neom to witness the work progressing The Line, which is now the world’s largest piling project. 

The images of construction equipment toiling on site showed that after six years of planning, Neom is here.

In 2022, there were $13.6bn of contract awards at Neom, surpassed only by Saudi Arabia, the UAE and Qatar 

Awards soar 

As Neom morphs from a futuristic concept into a real-world building project, the construction industry has started to benefit from a sharp increase in contract awards, which by mid-April 2023 totalled $27bn. 

As construction activity ramps up, the data shows that Neom is no longer a single project offering tactical opportunities. It has become a strategic market in its own right. 

In 2022, there were $13.6bn of contract awards at Neom, surpassed only by Saudi Arabia, the UAE and Qatar. 

On a submarket level, the total value of contract awards exceeds the Saudi capital Riyadh, where there were $11bn of awards, and Dubai, which has traditionally been regarded as a hotbed of construction, with $9.3bn of awards in 2022. 

As tendering activity continues for major contracts, Neom’s prominence as a projects market will likely increase further. 

So far, four major components of Neom have been officially launched by Prince Mohammed. They are The Line, Trojena,
Oxagon and Sindalah Island. Meanwhile, work has also progressed on other projects that have yet to be officially launched with the full CGI treatment, such as Neom International airport and the Gulf of Aqaba.

The Line was the first to be launched in January 2021 as a 170-kilometre linear belt of hyper-connected, car-free communities. Then in July 2022, the designs of The Line’s mirrored buildings were revealed. They are 200 metres wide and 500 metres above sea level, running entirely on renewable energy. Once complete, The Line will accommodate 9 million residents.

Piling work has started for the first modules of buildings that make up The Line (click here for images of the site). Infrastructure work for The Spine, the infrastructure corridor parallel to The Line that includes the high-speed rail, is also advancing.

Floating city

The second major project launch was Oxagon industrial city in November 2021. It will be built around an integrated port and logistics hub, with its octagonal design minimising environmental impact and optimising land usage. The city will feature the world’s largest floating structure and be powered by 100 per cent clean energy. 

The first major area of construction for Oxagon is the expansion of the existing Duba port. A contract for the first phase of that project was awarded earlier this year and a second phase is being tendered.

In March 2022, Prince Mohammed announced Trojena. Located in the mountains, it has temperatures 10 degrees Celsius lower than other regional cities and offers the potential for snow-covered ski slopes.

Trojena dams face countdown to make it snow

Trojena received added impetus in October last year when it was selected to host the ninth Asian Winter Games in 2029. Trojena will have two competition clusters for the games: a snow cluster for sports, including alpine skiing, snowboarding and slalom; and an ice cluster for sports, including ice hockey, figure skating and curling. The games village will have 14 luxury hotels and be powered entirely by renewable energy.

Construction contracts covering major infrastructure elements such as three major dams are at the tendering stage. Procurement activity is also starting for major buildings such as The Vault, which is a 198-metre-high, 253-metre-wide and 864-metre-long building that will serve as the gateway to Trojena.

Sindalah, Neom’s first luxury island destination, was announced in December 2022 and construction work is advancing (see main image). Once complete, the island will feature a marina, hotels and a golf course. 

Delivering these projects is a major challenge for the construction sector. Resource scarcity is a key issue for all projects in the kingdom, with construction companies already struggling to meet the demand for their services and expertise. Neom, along with its owner, the Public Investment Fund (PIF), is taking steps to address these challenges by investing in local construction firms, attracting international companies, improving payment terms and adopting alternative procurement methods. Despite these efforts, the construction sector faces sustained pressure.

New economy

Neom is much more than just a collection of construction projects. While other projects in the region offer opportunities for the construction sector and associated asset management services such as facilities management and hotel operation, the scale of Neom means it is creating a new economy.

It is an economy that not only aims to support the development of nine sectors to achieve the goals outlined in Vision 2030, but also intends to transform the way those sectors operate. 

The industrial city Oxagon will play a key role. Neom plans to create an integrated port and logistics hub that will be home to seven innovative sectors: sustainable energy, autonomous mobility, water innovation, sustainable food production, health and wellbeing, technology and digital manufacturing, and modern methods of construction. 

The Neom green fuels project is key to Oxagon’s clean energy ambitions. The integrated facility will produce hydrogen to be synthesised into carbon-free ammonia. Full construction work began on the project earlier this year after it reached financial closure. The facility is expected to be commissioned in 2026.

Neom, US-based Air Products and Acwa Power each have a 33.3 per cent stake in Neom Green Hydrogen Company, the special project vehicle implementing the project.

Aviation is another major area of investment. Neom plans to start operating its own airline, Neom Airlines, at the end of 2024 from the existing Neom Bay airport before operating from Neom International – a greenfield development inland close to Tabuk at the end of The Line.

Neom will morph from a construction project into a full-fledged economy

International airport

Plans for the international airport are advancing. US firm Aecom has been awarded a contract to provide project management consultancy services, and a series of construction and supply contracts are due to be tendered this year.

Although not confirmed, it is understood the first phase of the airport will have the capacity to handle 25 million passengers a year. A second phase could take the capacity up to 50 million a year. There is an aspiration for the airport to become the largest in the world, with a capacity of 100 million passengers a year. 

Another sector developing quickly is media. In April, Neom furthered its ambition to become the region’s leading TV and film production hub by opening more stages at its Media Village. The village now has four stages offering 12,000 sq m of production space. Six more stages are under development. Neom is also increasing its resort-style accommodation for cast and crew.

As well as gaining access to filming locations across Neom’s varied landscapes, companies using the facilities can enjoy Neom’s highly attractive production incentives, including cash rebates of over 40 per cent.

As these sectors and others advance, Neom will morph again from a construction project into a full-fledged economy. When launched in 2017, its GDP was projected to reach $100bn by 2030 – equivalent at the time to more than one-seventh of the kingdom’s GDP of $688bn. By focusing on nine high-value sectors, the Neom economy will be an affluent one. Its GDP per capita is projected to become the highest in the world.

Main image: Construction work is advancing on Sindalah Island, which is planned to open in early 2024. Credit: Neom

MEED's April 2023 special report on Saudi Arabia includes:

> GIGAPROJECTS: Saudi Arabia under project pressure
> ECONOMY: Riyadh steps up the Vision 2030 tempo
> CONSTRUCTION: Saudi construction project ramp-up accelerates
> UPSTREAM: Aramco slated to escalate upstream spending
> DOWNSTREAM: Petchems ambitions define Saudi downstream
> POWER: Saudi Arabia reinvigorates power sector
> WATER: Saudi water begins next growth phase
> BANKING: Saudi banks bid to keep ahead of the pack

https://image.digitalinsightresearch.in/uploads/NewsArticle/10787833/main.gif
Colin Foreman

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Contractor appointed for Abu Dhabi Riviera residences

    1 July 2026

     

    Dubai-based real estate developer Mered has appointed Turkiye’s Sera Group as the main contractor for its Riviera Residences project on Al-Reem Island in Abu Dhabi.

    The development will comprise more than 400 one- to three-bedroom apartments and 11 villas.

    Lebanese engineering firm Dar Al-Handasah is the project consultant, while Switzerland’s Herzog & de Meuron is the architect.

    The enabling works are being carried out by local contractor NSCC International.

    Mered and Sera Group are also working together on the Iconic Tower project in Dubai Internet City, where the developer awarded the main contract in December 2024.

    The 67-storey tower is being built on a site covering about 6,368 square metres.

    Local firm Mirage is the project consultant, while Singapore-based Hirsch Bedner Associates is the project architect.

    Dubai-based Chawla Architectural & Consulting Engineers is the architect of record, and Omnium International is the quantity surveyor.

    The foundation works were carried out by local firm Dutch Foundations.

    Mered’s latest contract awards in the UAE market come amid heightened real estate and construction activity, with schemes worth more than $323bn at the execution or planning stages, according to UK-based analytics firm GlobalData.

    GlobalData forecasts that output from the UAE’s residential construction sector will grow by 3% in real terms in 2026-29, supported by infrastructure, energy and utilities developments, as well as residential construction projects.

    READ THE JULY 2026 MEED BUSINESS REVIEW – click here to view PDF

    Stress test for Gulf aviation; Mixed performance as country outlooks diverge in the Levant; GCC tourism sector pivots from crisis to recovery mode.

    Distributed to senior decision-makers in the region and around the world, the July 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17509888/main.jpg
    Yasir Iqbal
  • Siemens Energy to supply turbines for Oman IPP projects

    1 July 2026

    Germany’s Siemens Energy has announced it will supply power generation technology and long-term service agreements for the 2.6GW Misfah and Duqm independent power producer (IPP) projects in Oman.

    The scope includes the supply of six F-class gas turbines, six generators and 20-year long-term service agreements for the equipment.

    The combined-cycle gas-fired plants will add almost 20% to the sultanate’s electricity generation capacity. They are expected to provide electricity to more than two million people.

    Oman’s Nama Power & Water Procurement (Nama PWP) signed power-purchase agreements (PPAs) for the development and operation of the plants in January.

    The two combined-cycle gas turbine plants are being developed by a consortium comprising Korea Western Power (Kowepo), Qatar’s Nebras Power, the UAE’s Etihad Water & Electricity (EtihadWE) and Oman’s Bhawan Infrastructure Services.

    The Misfah IPP will be led by Nebras Power and located in Wilayat Bousher in Muscat Governorate, with a planned capacity of 1,600MW.

    The Duqm IPP will be led by Kowepo and located in Wilayat Duqm in Al-Wusta Governorate, with a capacity of 800MW.

    In May, MEED exclusively reported that a consortium of China-headquartered Shandong Electric Power Construction No. 3 Company (Sepco 3) and South Korea’s Doosan Enerbility had been appointed as the main contractor.

    The gas turbines will have hydrogen co-firing capability, providing flexibility to increase hydrogen use over time, Siemens said in a statement.

    The turbines will be manufactured at Siemens Energy’s facility in Berlin. The generators will be produced at the company’s plant in Muelheim, Germany.

    READ THE JULY 2026 MEED BUSINESS REVIEW – click here to view PDF

    Stress test for Gulf aviation; Mixed performance as country outlooks diverge in the Levant; GCC tourism sector pivots from crisis to recovery mode.

    Distributed to senior decision-makers in the region and around the world, the July 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17506190/main.jpg
    Mark Dowdall
  • Qiddiya awards estimated $1bn racecourse deal

    1 July 2026

     

    Register for MEED’s 14-day trial access 

    Saudi gigaproject developer Qiddiya Investment Company (QIC) has awarded an estimated SR4.3bn ($1.1bn) contract for the construction of a racecourse at Qiddiya entertainment city, on the outskirts of Riyadh.

    The contract was awarded to Taj Dhabi, a local subsidiary of UAE-based Trojan Construction.

    The racecourse venue will cover 1.3 million square metres and accommodate 70,000 spectators.

    QIC issued the tender for the construction works in December last year, but formally announced the project only on 10 February. Contractors submitted their bids on 15 February, MEED previously reported.

    According to a statement published on QIC’s website: “The venue will include the region’s first straight-mile turf course, alongside a 2.2 kilometre (km) main turf track and a 2.4km inner dirt track.

    “A 21,000-seat grandstand will anchor the venue, with the ability to expand capacity to up to 70,000 guests through event overlays during major race days,” the statement added.

    A centrepiece of the venue will be a 110-metre central parade ring, located in the middle of the racecourse.

    The project also includes an equine hospital that will provide advanced veterinary services, including diagnostics, surgery, rehabilitation and emergency care for horses.

    The Qiddiya City horse racing venue is one of several major projects within the greater Qiddiya development. Other projects include an e-games arena, the Prince Mohammed Bin Salman Stadium, a motorsports track, a performing arts centre, the Dragon Ball and Six Flags theme parks, and Aquarabia.

    The project is a key part of Riyadh’s strategy to boost leisure tourism in the kingdom. According to GlobalData, leisure tourism in Saudi Arabia has experienced significant growth in recent years.

    GCC presses ahead with tourism projects

    READ THE JULY 2026 MEED BUSINESS REVIEW – click here to view PDF

    Stress test for Gulf aviation; Mixed performance as country outlooks diverge in the Levant; GCC tourism sector pivots from crisis to recovery mode.

    Distributed to senior decision-makers in the region and around the world, the July 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17506035/main.jpg
    Yasir Iqbal
  • NCP seeks firms for Saudi Arabia university hospital PPP

    1 July 2026

    Saudi Arabia’s Umm Al-Qura University, in collaboration with the National Centre for Privatisation & PPP (NCP), has launched an expression of interest for the completion of the construction and operation of the Umm Al-Qura University Hospital in Mecca.

    Issued to contractors on 30 June, the notice has a submission deadline of 21 July.

    The scope includes completing the remaining construction works, as well as the subsequent operation of the hospital.

    Upon completion, the hospital will have a capacity of 391 beds.

    The project will be delivered as a public-private partnership (PPP) under a design, build, finance, operate and maintain model.

    The contract duration is 30 years.

    The project is the latest healthcare project to be procured on a PPP basis in the kingdom. In June, MEED reported that Saudi Arabia’s Ministry of Health and NCP had awarded a PPP contract for the operation and management of the Sabic Specialised Behavioural Healthcare Hospital in Riyadh.

    That contract was awarded to SEH Healthcare, a consortium comprising local firms Specialised Medical Company (SMC Healthcare) and Health Gates Complex, and Germany’s Dr Ebel Fachkliniken.

    In a filing with the Saudi Exchange (Tadawul), SMC Healthcare said the total estimated project value is about SR3.8bn ($1bn).

    In January, Saudi Arabia launched a national privatisation strategy aimed at mobilising $64bn in private sector capital by 2030.

    Building on the privatisation programme first introduced in 2018, the strategy focuses on unlocking state-owned assets for private investment and privatising selected government services.

    In a statement, NCP said the strategy comprises 147 opportunities drawn from a broader pipeline of more than 500 projects across 18 sectors.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17506381/main.jpg
    Yasir Iqbal
  • On-site work starts for $5.4bn gas project in Algeria

    1 July 2026

    On-site work has started for the $5.4bn gas project in Algeria’s Illizi South block, days after a key meeting between Algeria’s Oil and Gas Minister Mohamed Arkab and the chief executive of the Saudi company Midad Energy, Sheikh Abdulelah Bin Mohammed Bin Abdullah Al-Aiban.

    The total investment of about $5.4bn will be fully financed by Midad Energy, including approximately $288m allocated to the exploration phase.

    It is being developed in partnership with Algeria’s national oil and gas company Sonatrach.

    Structured under Algeria’s Hydrocarbon Law No. 19-13, the agreement spans 30 years, with a 10-year extension option. It includes a seven-year exploration phase.

    The initial exploration phase is worth $288m and will involve 2D and 3D seismic exploration as well as drilling more than 13 appraisal wells, according to a report by the local news service Algerie360.

    The second phase, with an investment value of approximately $5.1bn, will involve drilling approximately 60 wells and constructing four natural gas compression units.

    The project is projected to produce a cumulative total of 125 billion cubic metres of natural gas and 204 million barrels of liquid hydrocarbons over 30 years.

    This will include 103 million barrels of liquefied petroleum gas and 101 million barrels of condensate.

    Midad Energy has also stated its intention to further expand its investment in Algeria’s oil and gas industry and explore new joint investment opportunities with Sonatrach.

    Algeria’s president, Abdelmadjid Tebboune, signed a presidential decree ratifying the development agreement in March.

    Presidential Decree No. 26-113 was issued on 8 March 2026 and underpinned by Articles 91-7 and 141.

    It approved a contract signed in Algiers on 13 October 2025 between Sonatrach and Midad Energy.

    The contract granted both companies the rights to explore and exploit hydrocarbons in the Illizi South area. Algeria’s National Agency for the Valorisation of Hydrocarbon Resources (Alnaft) announced the contract award on 11 October 2025.

    The block is located about 100 kilometres south of In Amenas, which was raided by Al-Qaeda-linked terrorists in 2013, leading to a hostage crisis.

    READ THE JULY 2026 MEED BUSINESS REVIEW – click here to view PDF

    Stress test for Gulf aviation; Mixed performance as country outlooks diverge in the Levant; GCC tourism sector pivots from crisis to recovery mode.

    Distributed to senior decision-makers in the region and around the world, the July 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17505309/main.jpg
    Wil Crisp