It’s a project that borders on megalomania — and one that’s also set to be publicly traded. Because the Neom special economic zone, which is being created in Saudi Arabia and is to become the home of the Smart City Oxagon, is to have an IPO in 2024. At least that’s what the Saudi Crown Prince Mohammed bin Salman (MBS) wants, who announced the mega project on 26,500 square kilometers with a volume of 500 billion dollars in 2017.
In the search for the business models of the future and a time when oil is no longer bubbling, Saudi Arabia is positioning itself more and more as a location for companies of all kinds. Oil money is still bubbling, which MBS allows, with Neom the really big project To build a special economic zone in the border triangle with Egypt and Jordan on the Red Sea.
With “The Line” there should be a car-free, zero-emission city in which up to a million people live, but still be able to walk to everything. The linear city is only 200 meters wide, but 170 kilometers long, and a high-speed train is intended as the main traffic route. Energy does not come from the Saudi oil wells, but from the sun and wind – at least that’s the plan.
In addition to “The Line”, there will be another city with Oxagon, including a fully automated port, half built into the sea. Energy is said to come from solar farms, wind power and hydrogen produced on-site by these renewable energies. A total of up to nine million people are to live in the special economic zone and companies from the construction, finance, media, technology, energy, sports, health and tourism sectors will settle there. In order not to deter Western prospects: According to MBS, alcohol should be allowed, women do not have to cover themselves.
The mega-project that is MBS’ vision for 2030 is expected to cost $500 billion, with the first construction phase costing a whopping $320 billion. Even if Saudi Arabia has a lot of money for such projects – the plan to take Neom public in 2024 also shows that it is willing to raise additional capital on international markets. It is planned to raise 133 billion dollars in capital.
Neom sees itself centrally located, according to the Saudis it is only up to an hour’s flight from 40% of the globe. But investors have so far been reluctant. Even if MBS is sustainable and visionary, he had the critical journalist Jamal Khashoggi murdered in 2018 and has had the reputation of a brutal autocrat since then at the latest.
Forced displacement of Bedouins
To make room for the mega-project, at least 20,000 people are being resettled from north-western Saudi Arabia, with members of the Howeitat tribe being the most affected. The case of Abdulrahim al-Huwaiti is particularly tragic: after publicly criticizing Neom for “forced resettlement” and “state terror”, he was killed by security forces. Many tribal members have turned down the money offered by the Saudi state for resettlement.
“Since the Neom project was announced in April 2017, local communities have been concerned for their land and rumors of evictions have been circulating. Those fears came true in January 2020 when local authorities notified residents of the decision to vacate it. This eviction order met with peaceful local resistance, which in turn was met with violence by the authorities, including the mass arrests in March and the killing of Abdul-Rahim al-Howeiti in April,” the human rights organization said in 2020 Alqst. She called on the consulting firms Oliver Wyman, McKinsey and Boston Consulting Group to distance themselves from Neom.
The list of cooperation partners is correspondingly short at the moment. Only the E-Formula 1 teams from McLaren and Mercedes are on it, as well as the Asian Football Confederation and the marine research company OceanX. Now MBS is apparently trying to gain more partners in the project through an IPO. Outcome: uncertain.
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