Saudi Arabia strives to counter giga-project doubts

As Saudi Arabia ramps up its global tour to attract more giga-project investment, doubts have begun to set in over costs and whether they will meet the imminent 2030 deadline.

The kingdom’s officials put on a big show at an international real estate event in Cannes in March and this week Neom kicked off the China leg of its global tour, meeting around 500 business leaders and officials in Beijing and Shanghai.

At the same time Diriyah Company – the developer revamping Riyadh’s historical district – unveiled a new retail project at the World Retail Congress in Paris.

Foreign direct investment levels are far below targets and the government now faces three years of budget deficits as oil prices fail to make break-even levels. 

Markets have taken in their stride the Red Sea crisis, caused by Houthi rebels in Yemen attacking alleged Israel-linked shipping. 

The threat of war between Iran and Israel has put prices over the key $86 a barrel mark over the past month but the long term trend is down. 

“Given that oil is still below fiscal break-even prices, it’s going to be the state and PIF doing a lot of the heavy lifting,” said James Swanston of Capital Economics, predicting more delays if oil prices slump.