Neom: Dubai-inspired megacity to be a catalyst for Middle East

On a sandy peninsula in northwest Saudi Arabia, the only interruption to miles of desert was the wreck of a Catalina seaplane, abandoned by its American pilot in 1960 and now covered in Arabic graffiti.

But it’s here that Saudi Arabia’s crown prince plans Neom, a city from scratch that will be bigger than Dubai and have more robots than humans, reports Bloomberg. Crown Prince Mohammed bin Salman envisions it as a “civilizational leap for humanity” outside the traditional Saudi constraints and a business hub with advanced manufacturing, bio-tech, media and airlines.

“We want the main robot and the first robot in Neom to be Neom, robot number one,” the crown prince said in an interview in a palatial setting next to the Ritz Carlton in Riyadh. “Everything will have a link with artificial intelligence, with the Internet of Things—everything.”

The sci-fi city with glimmering office towers and five-star hotels is supposed to represent Saudi efforts to transform a nation once swimming in oil money and now facing a severe financial squeeze.

It would be a microcosm of Saudi Arabia 2.0 while its new 32-year-old leader reconfigures the rest of the economy to make it fit for the modern world in a way that past rulers have failed to do. Other massive cities in the desert have been announced with much fanfare, then have floundered short of expectations, like the $10 billion office park on the outskirts of Riyadh sitting largely unoccupied and unfinished.

The city “constitutes an attempt to create an economic zone that is more efficient and streamlined than the overall economy that will take time to reform,” said James Dorsey, a Middle East specialist at Singapore’s Nanyang Technological University. “The question is whether one can isolate a megacity from the inefficiencies of the country’s economy.”

Money No Object

It’s also another example of Prince Mohammed’s willingness to throw money at projects regardless of dwindling resources. The unveiling of the megacity this week follows plans for a vast entertainment park, a tourist retreat and a $4.8 billion makeover for the waterfront in Jeddah on the Red Sea coast.

In keeping with the blueprint called Vision 2030, the project is nothing if not ambitious: The Gulf region is already full of skyscrapers in the sand and, whether Abu Dhabi or Doha, no metropolis so far has managed to match Dubai as an international business center, let alone outdo it.

It took decades to develop Dubai into a tourist destination with 2.9 million residents, the world’s tallest tower and regional headquarters for such international banks as Standard Chartered Plc. Dubai International Airport is the busiest in the world after Atlanta’s and Beijing’s.

The planned city, though, won’t compete with Dubai, but rather complement it and other parts of the Gulf, according to Prince Mohammed. It will create “new demand, not the same demand of Dubai,” he said. “It will help Dubai, it will help Bahrain. It will help especially Kuwait,” which can export to Europe faster and cheaper than now, he said.

New Future

Neom is a combination of “neo,” or new, and a derivation from the Arabic word “mustaqbal,” or future. It will be partly located in an area known as Ras Sheikh al-Hameed, a peninsula of land jutting about 31 miles (50 kilometers) into waters of the Red Sea after turning west off of route 5, the Saudi coastal road.

Some 10,000 square miles (25,900 square kilometers) have been allocated for the development of the urban area that will stretch into Jordan and Egypt. More than twice the size of neighboring Qatar, the area was chosen because of its “strategic location” and proximity to international shipping routes. This year, Egypt signed a treaty to give the Saudis two islands essential for linking the project to the Sinai.

The drive through the area of the future city cut a path through a barren desert, bordered on the right side by sun-burnt, off-white hills and desert flats. Across the turquoise water, a Saudi Border Guards base and a communications tower sat. There was nothing else around the curvature of the pristine bay, save for the wreck of the Catalina airplane.

The prince already knows what he wants to turn the strip of coast into. Neom Bay will start as the operational hub for the city and “be like the Hamptons in New York later on,” he said. But that doesn’t mean more jobs for the young Saudi population increasingly edgy over its economic prospects. “It’s not Neom’s duty to create jobs for Saudis,” Prince Mohammed said. “Neom’s duty is to be a world hub for everyone in the whole world.”

Raising Money

The Saudi Vision 2030 is underpinned by the creation of the world’s largest sovereign wealth fund, an estimated $2 trillion pot of assets that will drive investment and create jobs. The fund has already committed $20 billion to an infrastructure investment fund with Blackstone Group LP and as much as $45 billion for a technology fund run by SoftBank.

Pink Scarf

A promotional video released on Tuesday features a lifestyle so far unavailable in Saudi cities.

It showed women free to jog in leotards in public spaces, working alongside men and playing instruments in a musical ensemble. The one woman wearing a hijab had her head covered with a patterned pink scarf. Although the futuristic city will be business friendly, the government won’t allow alcohol, Prince Mohammed said.

“We can do 98 percent of the standards applied in similar cities, but there is 2 percent we can’t do, like, for example, alcohol,” the prince said. “A foreigner, if they desire alcohol, can either go to Egypt or Jordan.”

Even by Saudi standards, the area where they are building the city is conservative. Along the coastal road, there are no tourist facilities and restaurants that allow women, other than the recently opened Golden Tulip Sharma Resort.

The Jordanian beach resort of Aqaba will be a drive away, and there will be a bridge linking Egypt and its Sharm El-Sheikh tourist town, hit recently by a slump in visitors after terrorists downed a Russian passenger jet in October 2015.

Prince Mohammed dismissed concerns about past mistakes, such as the Riyadh office park or King Abdullah Economic City on the coast north of Jeddah. In the Vision 2030 document released in April last year, the government pledged to try to salvage economic cities that “did not realize their potential.”

“Neom is a totally different story,” he said. “There’s a commitment from the government; we’re putting our name on the first line.”

Beach Soccer

Initial ground-breaking will be in the last quarter of 2019, with phase one completed in 2025, according to a tour of the city given to delegates attending the Future Investment Initiative in Riyadh.

During the extravaganza, guests climbed stairs into a globe-shaped video projector with surround-sound and graphics that boasted a series of superlatives about the city, showing images of young people dancing at a rooftop party, an orchestra playing, a couple going for a walk and a family playing soccer on the beach.

Meanwhile, on the eastern side of the Red Sea bay, the Catalina plane sits, an abandoned piece of American-Saudi history protected by its remote location. The temperature hit 47 degrees Celsius in May last year when a Bloomberg reporter drove up to the region. A few resilient acacia trees capable of withstanding the heat dot the horizon.

The city will offer a “life with no limits,” the voiceover said during the tour. “In 2030 free time is plentiful, and we make the most of it.”

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