Saudi Arabia to begin building homes in US$500b futuristic city

Riyadh

SAUDI Arabia said it will start building the first residential area in a proposed US$500 billion futuristic city that's become a symbol of Crown Prince Mohammed bin Salman's ambitions for life after oil.

The kingdom plans to start work on Neom Bay in the first quarter this year, according to the state-run Saudi Press Agency (SPA). The area will have "white beaches, a mild climate and an attractive investment environment", SPA said. Phase 1 will be completed by 2020, according to the agency.

The planned megacity, unveiled more than a year ago, is part of the prince's grand plan to bolster non-oil revenue and attract foreign investment with eye-popping proposals to transform the economy, including two other tourism developments. Neom is to be financed by the Saudi government, its sovereign wealth fund, and local and international investors. The project includes a bridge spanning the Red Sea, connecting the proposed city to Africa. Some 25,900 sq km have been allocated for the development of the urban area, which will stretch into Jordan and Egypt.

Critics have questioned the mega-project after previous efforts to build industrial and financial cities have struggled to take off. Construction of the US$10 billion King Abdullah Financial District in north Riyadh began in 2006 but the 73-building hub remains unfinished.

Crown Prince Mohammed, in an interview with Bloomberg last October, referred to the first phase of the project as the Neom Riviera. "Neom city will be completed in 2025," he said, adding without elaborating that "there are interesting partners in the Middle East and globally. Interesting names".

A number of facilities will be opened at Neom by the end of this year, SPA reported, without providing further details. The private airport at the site will be used for commercial flights by year-end, it said. BLOOMBERG