The new WSJ report suggests that Saudi Arabia’s current eight-year-old Neom Project (a linear city with a futuristic, carbon-neutral length as envisaged by Crown Prince Mohammed bin Salman) has become a financial sinkhole.
According to an internal audit presented to Neom’s board last summer, countries suffering from delays and cost overruns are reportedly paying $50 billion, which could face another 55 years of construction, with an astonishing forecast cost of $8.8 trillion. That’s more than 25 times the annual budget for Saudi Arabia, the Journal notes.
The situation is beginning to resemble Saudi Arabia’s own Waterloo, and MBS misjudges the monumental challenges inherent in his strategy, as Napoleon did before him. Among the harsh realities that threaten the project’s derailment are inadequate labor, inadequate roads and lack of electricity.
However, there is a winner. Consulting giant McKinsey & Company reportedly makes more than $130 million a year for the services despite its role, given that it gives the company’s involvement in both planning and validating some of the projects’ financial forecasts, according to the story. A spokesman for McKinsey told WSJ there is “strict protocols to prevent conflicts of our interests.”
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