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
  • Solar deals signal Saudi Arabia’s energy ambitions

    13 February 2026

    Commentary
    Mark Dowdall
    Power & water editor

    Saudi Arabia’s recent agreement to build $2bn-worth of solar power plants in Turkiye is the latest sign that the kingdom’s energy influence is changing.

    Historically, this was measured in oil barrels and export volumes. Increasingly, this is extending to capital, structuring expertise and the ability to deliver record-low tariffs in competitive markets.

    Announcing the deal, Turkish Energy Minister Alparslan Bayraktar said tariffs for the plants would be the country’s lowest on record, with electricity purchased under 25-year power purchase agreements.

    It followed another announcement, in January, that Acwa is investing $200m to build a large-scale solar photovoltaic (PV) plant in the Philippines.

    Whether Saudi-backed companies ultimately retain long-term stakes or primarily develop and build the assets, their role at the front end is significant.

    Sponsors that bring sovereign backing, clear procurement processes and access to low-cost financing can influence tariffs and contract terms from the outset.

    There is also a geopolitical layer. Investing in Turkiye, or anywhere for that matter, strengthens political and economic ties at a time when regional alignments are shifting.

    Energy infrastructure is also long-term by its nature. It connects ministries, regulators, lenders and operators in relationships that often extend well beyond a single transaction.

    Saudi Arabia has spent the past few years refining its approach to pricing, structuring and financing large-scale renewables at home.

    Exporting that expertise may not rival oil in scale or visibility, but it does signal that Saudi Arabia is becoming more than just an energy supplier.

    Increasingly, it is becoming a participant in how other countries design and finance their energy transitions. That influence is still significant.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15645903/main.jpg
    Mark Dowdall
  • Saudi Arabia appoints new investment minister

    13 February 2026

    Register for MEED’s 14-day trial access 

    King Salman Bin Abdulaziz Al-Saud has made a series of senior government changes, including Khalid Al-Falih leaving his role as investment minister to become minister of state and a member of the cabinet.

    Al-Falih has been replaced by Fahad Al-Saif as investment minister. Al-Saif has been head of the Investment Strategy and Economic Insights Division at the Public Investment Fund (PIF) since 2024. That role involved formulating PIF’s long-term investment strategy. He has also served as head of the Global Capital Finance Division, a role he has held since joining PIF in 2021.

    The change of investment minister comes at a time when securing investments has become a key priority for Saudi Arabia as it prepares to hand over more projects to the private sector for delivery.

    King Salman also named Abdullah Al-Maghlouth as vice-minister of media and Abdulmohsen Al-Mazyad as vice-minister of tourism. Khalid Al-Yousef was named attorney general, and Sheikh Ali Al-Ahaideb will serve as president of the Board of Grievances.

    Faihan Al-Sahli was selected as director general of the General Directorate of Investigation, while Abdulaziz Al-Arifi was chosen to lead the National Development Fund. Haytham Al-Ohali will head the Communications, Space and Technology Commission, and Fawaz Al-Sahli will chair the Transport General Authority.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15645415/main.gif
    Colin Foreman
  • Indian firm wins major Oman substation contract

    12 February 2026

     

    India’s Larsen & Toubro has won a contract to build the Majan 400/220/132kV grid station in Oman.

    Estimated to cost $100m, the project includes an associated 400kV line-in line-out underground cable from Sohar Free Zone to the Sohar Interconnector Station.

    The contract was awarded by Oman Electricity Transmission Company (OETC), part of the government-owned Nama Group.

    The grid station will comprise eight 400kV gas-insulated switchgear (GIS) bays, eight 220kV GIS bays and 10 132kV GIS bays at the new Sohar Free Zone substation.

    The scope includes the installation of two 500MVA, 400/220kV transformers and two 500MVA, 220/132kV transformers.

    Local firm Monenco Consulting Engineers was appointed in April last year to provide design and supervision services for the project.

    As MEED exclusively revealed, the main contract was tendered in June, as part of three significant contracts to build new substations in the sultanate.

    The second contract, worth about $35m, covers the construction of the Sultan Haitham City 132/33kV grid station and associated 132kV line-in line-out underground cables running 4 kilometres from Mabella to Mabella Industrial Zone.

    The third contract, valued at about $100m, covers the construction of the Surab 400/33kV grid station and an associated 400kV line-in line-out cable from the Duqm grid station to the Mahout grid station. 

    Local firms Muscat Engineering Consulting and Hamed Engineering Services are consultants for the Sultan Haitham City and Surab projects, respectively.

    The two remaining contracts are currently under bid evaluation, with awards expected this quarter.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15638107/main.jpg
    Mark Dowdall
  • Developers appoint contractor for $500m wastewater treatment project

    12 February 2026

     

    Register for MEED’s 14-day trial access 

    Egypt’s Orascom Construction has won the engineering, procurement and construction (EPC) contract for a major wastewater treatment project in Saudi Arabia’s Eastern Province.

    A consortium of Saudi utilities provider Marafiq, the regional business of France’s Veolia and Bahrain/Saudi Arabia-based Lamar Holding is developing the $500m (SR1.875bn) industrial wastewater treatment plant (IWWTP) in Jubail Industrial City 2.

    Sources close to the project confirmed the appointment to MEED, adding that the project has now entered the construction phase.

    Industry sources also said that financial close on the project is expected to be reached in the coming days.

    In September, the developer consortium was awarded a contract, under a 30-year concession agreement, by Saudi Aramco Total Refining & Petrochemical Company (Satorp), a joint venture of Saudi Aramco and France’s TotalEnergies.

    The planned facility will treat and recycle wastewater from Satorp’s under-construction Amiral chemical derivatives complex, also in Jubail.

    Marafiq, formally Power & Water Utility Company for Jubail and Yanbu, will own a 40% stake in the dedicated project company. Veolia Middle East SAS will hold a 35% stake, and Lamar Holding’s Lamar Arabia for Energy will hold the other 25%.

    The planned IWWTP, which will primarily serve the $11bn sprawling Amiral chemicals zone, will implement advanced water treatment and recovery technologies to process complex industrial effluents, including spent caustic streams. Treated water will be reintegrated into the industrial processes, supporting closed-loop reuse and energy efficiency.

    The project follows a concession-style model, akin to a public-private partnership (PPP), where the developer consortium invests in, builds and operates the wastewater plant over a 30-year period, with returns linked to service delivery.

    Marafiq has been involved in several similar projects across Saudi Arabia, including as the sole owner of the Jubail industrial water treatment plant (IWTP8), which treats complex industrial effluents for petrochemical and heavy industrial companies.

    In 2020, Saudi Services for Electro Mechanic Works was awarded the $202m main contract for the fourth expansion phase of IWTP8. Construction works on the project are expected to be completed by the end of the quarter.

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

    Spending on oil and gas production surges; Doha’s efforts support extraordinary growth in 2026; Water sector regains momentum in 2025.

    Distributed to senior decision-makers in the region and around the world, the February 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/15637523/main.jpg
    Mark Dowdall
  • Dewa raises Empower stake in $1.41bn deal

    12 February 2026

    Dubai Electricity & Water Authority (Dewa) has announced it has increased its stake in Emirates Central Cooling Systems Corporation (Empower) from 56% to 80%.

    The transaction was completed through the purchase of 2.4 billion shares and the transfer of the entire ownership of Emirates Power Investment (EPI), which is wholly owned by Dubai Holding.

    The total value of the deal is AED5.184bn ($1.41bn).

    Empower currently holds over 80% of Dubai’s district cooling market and operates 88 district cooling plants across the emirate.

    According to MEED Projects, the UAE’s district cooling sector currently has nine projects worth $1.29bn in the pre-execution phase.

    Empower has ownership in four of these projects, which have a combined value of $472m.

    This includes a $200 million district cooling plant at Dubai Science Park, with a total capacity of 47,000 refrigeration tonnes serving 80 buildings.

    Empower signed a contract to design the plant last August, with construction scheduled to begin by the end of the first quarter of 2026.

    The utility is also building a district cooling plant at Dubai Internet City.

    UAE-based TMF Euro Foundations was recently appointed as the enabling and piling subcontractor for the project.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15635949/main.jpg
    Mark Dowdall