Saudi Arabia Cut Targets for Neom Metaverse Due to Funding

Saudi Arabia has cut back ambitions for its $500 billion real life metaverse project Neom, which is currently under construction in the country’s northwest, due to funding concerns. 

Originally, the government aimed to have about 1.5 million people living in the futuristic self-contained city The Line by 2030, but that number has been reduced to under 300,000 by the same deadline, Bloomberg reported, citing people with knowledge of the matter.

Also read: Saudi Arabia’s Neom Reveals New Underground Metaverse Aquellum 

Funding challenges

Funded by the Saudi Arabian Public Investment Fund, or PIF, the rectangular prism-like volume is planned to be built in stages and eventually cover around 170 kilometers stretch of desert in Tabuk province. But officials now expect to have just 2.4km of The Line completed by 2030, the report says.

As the name suggests, The Line is a linear city consisting of two parallel, 500 meter-high linear skyscrapers. It is Neom’s flagship development, but there have been questions about its viability.

Following the cut back, at least one contractor hired to build The Line has dismissed some of its workers at the construction site, according to a document seen by Bloomberg. Neom executives have not publicly commented on the matter.

However, “officials have maintained their overall objectives for The Line”, the news agency said.

The the scaling down comes as Saudi Arabia’s sovereign wealth fund, the main entity behind Neom, has yet to approve the project’s budget for 2024, according to Bloomberg.

The Fund, which saw its cash reserves plummet to just $15 billion in September – the lowest level since 2020, is now looking at other ways to raise cash to finance the project. It includes debt sales and stock offerings in some of the companies owned by PIF.

In December, Saudi Arabia Finance Minister Mohammed Al Jadaan reportedly admitted that it could take longer to “build factories, build even sufficient human resources” at Neom by 2030.

“The delay or rather the extension of some projects will serve the economy,” he added.

What is the Neom metaverse?

Neom is a huge futuristic urban metropolis, powered by renewable energy, which is being built at a cost of $500 billion. Covering over 263,000ha, much of Neom has been reserved for nature and aims to achieve sustainable tourism that minimizes ecological damage.

The project is part of Crown Prince Mohammed bin Salman’s Vision 2030 plan to diversify Saudi Arabia’s economy from oil. Neom will run as a net-zero carbon entity and robots are expected to help its planned millions of residents with everyday tasks.

Designers say The Line’s development will cure many of the issues faced by modern cities, like traffic, air pollution and urban sprawl. The project is unique in that it is designed in a utopian way, almost in the same manner as metaverse cities.

In the metaverse, cities are being built that give what founders call an “immersive experience resembling a real life city but as part of augmented reality.” They are physical buildings with virtual counterparts, or “digital twins”. The Line’s aesthetics appear to provide a metaverse feel to an otherwise real life object.

However, some top architects have questioned the practicality of the Neom idea, saying it borders on vanity more than functionality at this point. Architect Brent Toderian previously expressed doubt over The Line’s “staggering vertical-ness.”

“It [the mega-city] aims to erase roads for cars, but it is also erasing streets for people. How will it create coherent civic spaces?” Toderian, queried.

Meanwhile, Neom has continued to develop in other aspects. In January, it revealed Aquellum, its luxury destination off the Gulf of Aqaba coast. Aquellum is embedded within a 450-meter-high mountain range, exposing an experiential and underground ‘digitalized community,’ absorbed in the metaverse.

So far, Neom’s main success story is the development of the $8 billion solar and wind farms project that will be used to create so-called green hydrogen. Saudi Arabia hopes to become one of the world’s biggest producers of such fuel as part of effort to reduce its dependence on petro-dollars.

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• Source: https://metanews.com/saudi-arabia-cuts-targets-for-neom-metaverse-due-to-funding-concerns/