Saudi Crown Prince Mohammed bin Salman has made a few statements that have captured the attention of the media. He ended the long-standing ban on women driving, which met a mixed reaction from people across the country. He just made one of his rare appearances when he announced plans to build a new city on the Red Sea coast, promising a lifestyle not available in today’s Saudi Arabia as he seeks to remake the kingdom in a time of dwindling resources.
The prince said the city project, to be called “NEOM,” will operate independently from the “existing governmental framework” with investors consulted at every step during development. The project will be backed by more than $500 billion from the Saudi government, its sovereign wealth fund, local and international investors, according to a statement released on Tuesday at an international business conference in Riyadh.
The prince made it clear to the bankers and economic policymakers that the kingdom of Saudi Arabia is moving towards a new generation of cities, which will be completely powered by clean renewable energy. These cities will not be conforming to the norms already established in the kingdom and will have no room “for anything traditional.”
The zone specified for the city of NEOM will be adjacent to the Red Sea and the Gulf of Aqaba, and near maritime trade routes that use the Suez Canal. The land mass will extend into Egypt and Jordan, making it the first private zone to cover three countries.
Public Investment Fund, Saudi Arabia’s top sovereign fund stated that the city will be powered completely by wind and solar energy. This area will also serve as a gateway to the proposed King Salman Bridge connecting Egypt to Saudi Arabia. “Neom is situated on one of the world’s most prominent economic arteries,” PIF said. “Its strategic location will also facilitate the zone’s rapid emergence as a global hub that connects Asia, Europe, and Africa.”
Klaus Kleinfeld, the former chairman and chief executive officer of Siemens AG and Alcoa Inc., was appointed to lead the development of NEOM. According to Steffen Hertog, a professor at the London School of Economics and longtime Saudi-watcher, The project “seems to be broadly modeled on the ‘free zone’ concept pioneered in Dubai, where such zones are not only exempt from tariffs but also have their own regulations and laws, hence operating separately from the rest of government,”
The vision behind the project is to minimize the dependency on oil exports for the kingdom. With the dwindling oil prices, the prince understands it’s easier said than done. He said “Dreaming is easy, achieving it is difficult,”