Saudi Arabia may be considering scaling down some 'megaprojects' amid strain on government funds
REUTERS/Faisal Al Nasser
- Saudi Arabia may be taking another look at some of its planned megaprojects.
- A government-associated advisor recently told the BBC that some projects are being reviewed.
- Saudi has previously insisted that its Vision 2030 projects, especially Neom, are on track.
Saudi Arabia is reportedly reassing some of its ambitious megaprojects.
The Kingdom's Vision 2030 plans feature several massive construction projects, including the futuristic megacity Neom and an entertainment project on the outskirts of Riyadh.
Recently, the nation has been plagued by reports that it is struggling to bear the financial strain of its mighty plans.
A government-associated advisor, who asked not to be named, recently told the BBC that some projects are being reviewed, and some could face delays.
"The decision will be based on multiple factors," the advisor told the outlet. "But there is no doubt that there will be a recalibration. Some projects will proceed as planned, but some might get delayed or scaled down."
The report echoes recent comments made by Saudi officials in public and reportedly in private.
In April, the kingdom's finance minister said "challenges" meant adjustments would be made to some aspects of its Vision 2030 plan.
At a World Economic Forum meeting in Riyadh, Mohammed Al-Jadaan said the country would "change course" and "adjust" as needed.
"We will downscale some of the projects; we will accelerate other projects," he said during a session on global economic growth.
Amine Mati, an assistant director at the IMF and its mission chief for Saudi Arabia, told The FT that Saudi authorities were "recalibrating" to assess whether some spending should be delayed.
Citing a person familiar with the thinking at the Public Investment Fund, the outlet reported that even Saudi Arabia's leader, Crown Prince Mohammed bin Salman, may be ready to have some "tough conversations" about his ambitious vision for the country.
In public, Saudi has largely been keen to insist that the megaprojects, especially Neom, are on track.
Earlier this year, the kingdom's minister of economy and planning told CNBC that the project had "no change in scale" despite media reports to the contrary.
Experts previously told BI that Saudi Arabia was struggling to attract the foreign investment needed for the development. Low oil prices have also impacted government finances, seemingly forcing the Saudis to look for new revenue streams.
Representatives for Neom did not immediately respond to a request for comment from Business Insider, made outside normal working hours.