[Image of a desert, Credits to Pexels]

Saudi Arabia’s urban project, Neom City, has encountered a major obstacle in its construction.

According to Bloomberg, a New York media station, a former member of the Neom project revealed in early April that plans for the first stage of construction have been adjusted to a smaller scale.

The nation is primarily focusing on the construction of The Line, a residential city that will be the landmark of Neom.

However, while Saudi Arabia’s initial plan was to develop The Line into a city that can accommodate 1.5 million residents by 2030, they have decided to only accommodate around 300 thousand residents instead.

The cause of such adjustment is expected to be the delay of construction, and surprisingly, financial issues.

The Line will be completely sustainable by using wind, solar, and hydrogen power as its main energy sources and recycling water from the Red Sea.

It is also expected to be an eco-friendly city, having no cars, no roads, and no emissions inside the city, and having a unique structure with a width of 200m and a length of 170km.

Although such features may look highly innovative and ambitious, current technology has limitations in making the plan into reality, and it might take more than just a few decades to complete the construction.

Furthermore, an immense amount of budget is required to consistently use innovative technology throughout the construction of The Line, but even the Public Investment Fund (PIF) of Saudi Arabia, one of the richest organizations in the world, as well as the main financial source of the project, is facing drawbacks in its investments.

Last year, the PIF spent the most money out of all the national investment funds around the world: 31.5 billion US dollars.

The expenditures include investments in sports entertainment, such as football or tennis, and in other technological areas, such as developing electric vehicles.

With only 15 billion dollars left in the PIF, it is difficult for Saudi Arabia to significantly advance the Neom project.

Although oil prices have recently increased to 90 dollars per barrel, the price must reach up to at least 110 dollars per barrel for the PIF to avoid a deficit, as they highly rely their finances on oil businesses.

Therefore, The Line project must rely more on outside resources, such as foreign investment.

Although some executives of Neom are putting in effort to persuade foreign investors, there are not any major agreements being made.

Many investors today agonize over expenditures, especially due to global market price fluctuations.

The Neom City project is a major enterprise that plans to create the most developed and technologized region in the world, containing tropical resorts, tourist attractions, business centers, global trade hubs, and various other facilities.

Directed by the Crown Prince and Prime Minister Bin Salman himself, the project is one of Saudi Arabia’s major focal points.

However, as the Neom City project currently stands in doubt of completion, eyes are focusing on how Saudi Arabia will find an effective solution that could break through the obstacles that lie ahead.