Saudi Arabia's ambitious future smart city, Neom City, being built in the heart of the desert, is facing a crisis. A warning has been issued that construction costs are soaring as oil prices, the main funding source, are falling, leading to financial pressures. Even though international events, including the 10th Winter Asian Games scheduled for 2029, have been secured, the once swiftly progressing Neom City is now expected to be scaled down from its original scope. Recent analysis of satellite images taken of the Neom City construction area revealed that some sections, including those assigned to domestic construction companies, are still underway. However, signs of reduced construction activity have been detected in various locations compared to 2024.
On the 2nd, the satellite service company Naraspace released results of an analysis on the construction status of Neom City and the sections of the project assigned to domestic corporations, utilizing satellite images operated by the National Oceanic and Atmospheric Administration (NOAA) and the European Space Agency (ESA).
Reduced construction activity compared to 2023
Neom City is a key project in the decarbonization national development plan 'Vision 2030,' announced in 2017 by Saudi Arabia's de facto ruler and global billionaire, Crown Prince Mohammed bin Salman. The main details involve creating an eco-friendly, intelligent city and advanced industrial complex covering an area of 26,500 square kilometers, which is 44 times the size of Seoul, in the desert and mountainous regions near the Red Sea in northwestern Saudi Arabia. Major developments include 'The Line,' a large-scale eco-friendly vertical city 500 meters high and 170 kilometers long, as well as the luxury resort 'Sindalah,' the cutting-edge industrial district 'Oxagon,' and the gigantic mountainous tourist site 'Trojena.' South Korea's Samsung C&T and Hyundai E&C are participating in the Neom City construction project. The stock prices for both companies rose when they first expressed their intention to participate.
However, this project is recently showing warning signs of a crisis. Following rumors of financial trouble, the project manager has been suddenly replaced. Experts with past misconduct are being appointed, leading to criticism that it has become a 'den of troubles.' Bloomberg reported last April that the budget for the Neom project has been drastically reduced, raising doubts about its success.
Analysis of images captured by the Sentinel-2 satellite, operated by the European Space Agency (ESA), from 2022 to 2025 using RGB (red, green, blue) sensors, which can be perceived by human eyes, confirmed that construction is actively progressing in the center of The Line. The satellite is equipped with optical cameras that have a resolution of 10 to 60 meters, detecting various lights, including visible light, near-infrared, and shortwave infrared spectra.
Currently, the first earth structure, 'Hidden Marina,' is under construction in the center of The Line. Dennis Hickey, Neom’s Chief Development Officer, stated during an event in Riyadh, Saudi Arabia, last February that 'Hidden Marina' is envisioned as a futuristic reflective structure 500 meters tall. He explained that a 2.4-kilometer-long pier will be built here, along with hotels, shops, schools, and residential facilities for about 200,000 residents.
The analysis team studied nighttime light intensity data provided by the Suomi National Polar-orbiting Partnership (NPP) satellite, operated by the National Oceanic and Atmospheric Administration (NOAA), to observe construction progress since 2011. The intensity of the light from buildings and vehicles at night is used as an indicator of how active industrial and economic activities are. The brighter the light intensity at night, the more active the economic activities are interpreted to be. The analysis team stated that they can interpret how actively construction is progressing in the key sections of The Line using this method.
From March 2023 to March 2024, the nighttime light intensity is reported to have generally increased. This suggests that construction activities were relatively active until the first half of last year.
From March to September last year, the light intensity near the center and the entrance of the underground tunnel of The Line also increased. Domestic construction companies Samsung C&T and Hyundai E&C are working on the high-speed and freight train underground tunnel, which spans 170 kilometers, including a challenging 12.5-kilometer mountainous section.
However, in September of the same year, the nighttime light intensity in the eastern area of The Line was confirmed to have decreased compared to the entrance of the underground tunnel. In contrast, the underground tunnel, which serves as the entrance for construction sites managed by Korean corporations, showed consistent nighttime light intensity. It appears that the construction by domestic contracting corporations is proceeding smoothly.
Images captured by the Pleiades satellite of the French National Center for Space Studies (CNES) from March 2023 to May 2024 showed construction materials being transported from the entrance of the underground tunnel. While some reduction in construction materials was noted last November, the presence of several vehicles parked indicated that construction is ongoing. This area was visited last October by Chung Eui-sun, chairman of Hyundai Motor Group, and Lee Jae-yong, chairman of Samsung, and is the only publicly disclosed site among the construction areas. A spokesperson from Samsung C&T stated, 'Most of the sections managed by Korean corporations are being constructed underground.' They added, 'There may have been some speed adjustments in the middle, but we understand that it is now nearing completion.'
Active construction of marinas and wind power amid controversy over scaled-down size
This analysis also examined the status of the wind power plant near The Line and the construction sites in the eastern development area. In the northwest of the images taken by the Sentinel-2 satellite, roughly 172 wind turbines were installed, and structures presumed to be wind power plants were spotted throughout. It was also confirmed that the Neom Community, which serves as accommodations for construction workers, has been established around the construction site of The Line, suggesting that efforts are being made on the main project 'The Line,' despite budget cuts.
Indeed, even after the crisis of Neom City was raised, the nighttime light intensity in the vicinity of the wind power plant and Neom Community has gradually increased over the past year and a half. This indicates that construction activities are taking place in that area. In contrast, significantly reduced nighttime light intensity has been observed in the eastern development area on the right side of The Line since September of last year. When examined through RGB images, there were also no clear changes in this region. The analysis team stated, 'It appears that construction is ongoing centered around the location of The Line, where the wind power plant and Hidden Marina are located.'
Neom City aims for its first phase to be completed by 2030 and the final completion by 2039. As it operates on eco-friendly energy sources, such as hydrogen and solar power, there are no roads or cars. Citizens will travel to their destinations using high-speed trains and air taxis. Thanks to climate control managed by zones, they will enjoy a comfortable environment year-round. Crown Prince Mohammed bin Salman noted during the unveiling of The Line in 2022 that the anticipated population of residents in this area would reach 1 million by 2030 and 9 million by 2045.
However, the plans are delayed and scaled down compared to the original schedule. The BBC reported, citing a Neom official, that the 'Neom' construction project appears to be shrinking from its planned scope. Bloomberg also reported last April that Saudi officials believe that only 2.4 kilometers of The Line, which spans 170 kilometers, will be completed by 2030.
The Saudi government relies heavily on oil for much of the financing of the Neom project. However, in recent years, falling international oil prices have caused financial difficulties. Project costs have also surged. The Saudi government initially estimated the project cost to be $500 billion (approximately 685 trillion won) at the announcement of the Neom project. Recent analysis by The Wall Street Journal (WSJ), based on an obtained audit report, forecasts that $8.8 trillion will be spent by 2080. It revealed that the capital expenditure needed to complete the first phase by 2035 is as high as $370 billion. Reports indicate that Saudi authorities have lowered their targets—the goal of housing 1 million residents by 2030 was revised down to 300,000 due to project delays.
In February, the Saudi government publicly unveiled specific construction plans for Hidden Marina, which will serve as a core hub of The Line, a high-density vertical city model, in response to external concerns. However, information regarding the progress of Neom City construction remains thoroughly confidential. As the Neom City construction project has stalled, participation from domestic corporations has dwindled compared to initial expectations after the first-phase project. So far, the total contract amount won by domestic construction companies stands at 1.3 trillion won. A representative from Hyundai E&C stated, 'Domestic corporations are undertaking challenging mountainous terrain construction and the tunnel construction is nearly complete. Construction is still ongoing at the site and we aim for completion this year.'
References
Naraspace Earth Paper, https://ep.naraspace.com/
With the advancement of low-cost space launch vehicles and small satellite technology, we have entered an era where we can monitor events on Earth in real time. Satellites are now utilized in various areas, including defense, disaster monitoring, damage assessment, and industrial trend analysis. ChosunBiz is working with the domestic satellite service company Naraspace to analyze satellite image data in defense, industry, economy, society, and international news in a series of space journalism titled 'A look at the world through satellites' and 'The economy viewed through satellites' in the era of space economics.