Introduction

Determining a precise Return on Investment (ROI) figure for the NEOM project over the past five years poses significant challenges, as the initiative remains in its early developmental phase and is undergoing continuous adjustments. Nevertheless, an analysis of key developments and modifications reveals important insights. Initially, the estimated cost for NEOM was projected at $500 billion; however, more recent projections indicate that the total cost could escalate to approximately $1.5 trillion.

Scaling Back of Plans

1. The Line:

Originally conceived to extend over 105 miles, recent assessments suggest that its actual length may only reach between 1.5 to 2.4 kilometers by 2030.

2. Population Targets:

While initial objectives aimed for a population of 1.5 million residents in The Line by 2030, the project has encountered difficulties in attracting the anticipated level of foreign investment.

3. Public Investment Fund (PIF)

The Public Investment Fund of Saudi Arabia, responsible for financing NEOM, has experienced a decline in cash reserves from $50 billion in 2022 to $15 billion as of September 2023.

Shift in Focus

1. **Sports and Tourism:** NEOM is now placing a higher priority on developing sports venues and tourism attractions, including the construction of a stadium for the 2034 World Cup and a winter sports resort.

2. Modular Approach

The project is embracing a phased, modular development strategy to enhance feasibility and adaptability.

Social Impact

While not directly tied to financial ROI, NEOM has reported several positive social outcomes:

1. The NEOM Seven Senses Program has generated a social return on investment exceeding SAR 40 million.

2. NEOM’s social responsibility initiatives have positively impacted 50,000 individuals within local communities.

Ongoing Commitment

Despite the challenges faced, Saudi Arabia remains steadfast in its commitment to the NEOM project:

1. Projections indicate that the workforce is expected to grow from over 140,000 to more than 200,000 by 2025.

2. Recent agreements totaling $50 billion have been established with Chinese firms to stimulate capital inflows.

Conclusion

While the initial ROI expectations for NEOM have not been realized due to various challenges and adjustments, the project continues to evolve. The emphasis has shifted towards more immediate and attainable objectives, such as the establishment of sports venues and tourism attractions. The true financial ROI of NEOM is likely to take several years