Complex Made Simple

Saudi NEOM: Let the billions in construction funds begin

NEOM is a fantastic dream now becoming a reality with major simultaneous contracts and projects underway

NEOM signed a $5bn agreement with Air Products, a US company, and ACWA, a Saudi company Riyadh to award billions of dollars in contracts for Qiddiya The Amaala airport will be mirage-like and slated to be operational by 2023

NEOM, the Saudi $500bn futuristic city by the Red Sea announced in October 2017 by Saudi Crown Prince Mohammed bin Salman’s (MBS), was envisioned to be managed by robots, be entirely powered by renewable energy, lit by an artificial moon, and become a haven for high-tech industries.

Its construction is gathering momentum with recent multi-billion dollar signings, alongside other related gega projectss The giga-projects, include Amaala, the Red Sea Project and Qiddiya. 

NEOM

Overlooking the Red Sea and the Gulf of Aqaba, NEOM occupies an area of 26,500 square kms, along with a 468-km waterfront according to its website. The company is wholly owned by the $350 bn Saudi sovereign wealth fund, the Public Investment Fund (PIF). When the city is completed, it’ll be 33 times the size of New York. The project is expected to be a cross between Silicon Valley, Dubai and the Seychelles. It will include towns, ports, and research centers, as well as entertainment and tourist destinations.

Read; Mega development projects such as NEOM and Al Qiddiya to create finance opportunities

A vision on mission

Riyadh to award billions of dollars in contracts for Qiddiya, a vast sports and entertainment complex; and a high-end Red Sea tourism development.

Qiddiya, a more than $15bn development that will include a Formula One motor racing track, 20,000-seat stadium and Six Flags theme park, last month awarded a $187 million contract for roads and bridges, one of about $2.6bn in “near-term” contracts it plans to allocate this year. 

Last month, NEOM signed a $5bn agreement with Air Products, a US company, and ACWA, a Saudi company 40% owned by the Public Investment Fund (PIF), the kingdom’s sovereign wealth fund, to develop a renewable energy project. ACWA is a finance and engineering company that develops and owns power plants and water desalination facilities worldwide. Air Products is a leading producer of industrial gases, such as oxygen, hydrogen, nitrogen and argon.  

NEOM also recently awarded a contract to US firm, Bechtel, to “oversee and create resource-efficient utilities and a highly advanced transport system to connect NEOM’s cognitive cities,” among other projects. 

The scope of work for the contract will involve “integrating sustainable land use, intelligent urban design and multi-modal mobility”.

In the past, Bechtel worked on a variety of complex infrastructure projects in Saudi, including the Jubail Industrial City and Riyadh metro.

The PIF is the lead developer of all three projects, but was also hoping to attract foreign investment. Riyadh transferred $40bn of its foreign reserves to the fund in March and April. The PIF said: “We do not believe that the current economic conditions will have significant impact on project timelines.”

E-sports signing

The League of Legends European Championship (LEC) is the name of the professional League of Legends e-sports league run by Riot Games, in which ten teams compete.

The LEC said NEOM has “their eyes set on the future” and it’ll be sponsoring the Oracle Lens during live broadcasts “to help future-proof the LEC stage.”

Read Insights: Where does Saudi’s $500bn NEOM stand today?

Red Sea Project

The over $10bn Red Sea Development Company project, covering 5 islands and slated for completion in 2023, awarded its biggest contract to date, signing up Saudi companies to build an airport designed by Foster + Partners, British architects. 

John Pagano, chief executive of the Red Sea Development Company said the capital for the Red Sea development was already committed, adding that the company was also working on a debt facility with Saudi banks.

Qiddiya

Qiddiya has been divided into five development areas, which are Resort Core, City Centre, Eco Core, Motion Core, and the Golf and Residential Neighbourhood.

According to the CEO of The Qiddiya Investment Co. (QIC), Michael Reininger, mass grading and site preparation have now started on the Resort Core and City Center.

QIC has awarded the first construction contract of the year to a major Saudi company, as building continues at the Qiddiya site.

QIC is kicking off the 12-month project with the landscaping of earth to ensure the site preparation of a combined area of more than four million sqms.

Qiddiya will boast more than 300 facilities, including theme parks, water parks, a sports city and Six Flags Qiddiya.

The first phase of Qiddiya is set to launch in early 2023.

Amaala

Amaala is located in the Red Sea Riviera on the Kingdom’s northwestern coastline. 

The new island will be home to an ‘artist village’ boasting an modern art museum and arts academy, an Arabic botanical garden, an artists’ colony, and immersive art-filled experiences.

Amaala will cover 1460 square miles of land and offer over 200 retail, recreation, dining and wellness spaces as well as 800 residential units. Amaala, to be completed in 2028, predicts to generate over 22,000 jobs in tourism, retail, leisure and hospitality with 3 different sites focused on lifestyle, luxury living, and wellness.

Flying towards the Amaala airport in Saudi Arabia will be a mirage-like airport currently under construction but slated to be operational by 2023, and planning to accommodate one million travelers per year.