By Saeed Azhar
DUBAI (Reuters) – It looks like an unlikely sight, a megacity in the desert with no cars or roads, all run by machines that can recognize your face.
However, preparations for NEOM, the $ 500 billion project signed by Prince Mohammed bin Salman to diversify Saudi Arabia’s economy, are well underway. The organization behind the development, which is expected to be almost the size of Belgium when it is completed, will hire 700 people this year, according to Simon Ainslie, director of operations for the venture.
While NEOM is being sold as a vision of a brighter future, international investors have not yet bitten it.
The scale of the project is vast and the region already has well-established transportation and business centers in Dubai, Abu Dhabi and Qatar. Development is also inextricably linked to the Crown Prince, who as the de facto leader of the kingdom has drawn the ire of the Saudi Arabian war in Yemen and his own links to the death of journalist Jamal Khashoggi.
A US intelligence report released last week concluded that the prince approved an operation to “capture or kill” Khashoggi, who had criticized Saudi policies in columns in the Washington Post. Saudi officials deny this and reject the report’s conclusions.
Analysts say the report is unlikely to change investor sentiment towards Saudi Arabia in the absence of U.S. action against the prince.
“They expected a bigger push from management (Biden), but if that is the signal it is very weak,” said Neil Quilliam, managing director of Azure Strategy, a consultancy focused on the Middle East
“So I don’t see this as a major deterrent for most companies looking for opportunities in the realm.” [L5N2L06I7]
Quilliam said there was some skepticism about the so-called ‘giga projects’, citing the King Abdullah Economic City project in the early 2000s, which never really took off.
The Saudi government media office and NEOM did not immediately respond to a request from Reuters to comment on NEOM’s situation following the US report.
Before the report was released, NEOM said the project had attracted national and international interest.
“NEOM is in negotiations with several companies from different sectors that want to get involved,” the agency said in a statement.
NEOM was launched publicly in 2017, but the large-scale construction of the city has not yet started. The project currently employs more than 750 people, 500 of whom were hired last year.
The assassination of Khashoggi by Saudi agents in Istanbul in 2018 had already sparked international protests, prompting some people at the time to withdraw from NEOM’s advisory board.
The list of current members is not publicly available and NEOM declined to say who is participating in it.
COGNITIVE CITY
NEOM’s funding will initially come from Saudi Arabia’s sovereign wealth fund, the Public Investment Fund, according to two funding sources close to the issue.
“Investors will start to take an interest when the central infrastructure is operating, so that they do not take absolute risks in the green field,” said a financial source familiar with the project.
In 2017, Softbank Group CEO Masayoshi Son said the company would work with Saudi Arabia to develop NEOM.
Softbank and Son did not respond to a request from Reuters to comment on their current investment plans for NEOM.
The Saudi sovereign fund PIF invested about $ 45 billion in Softbank’s inaugural $ 100 billion technology fund.
PIF said in an e-mail that its role in large projects was to act as a key long-term investor to ensure “that the capital allocated to all of its projects, including NEOM, generates sustainable returns that generate value for investors. long-term shareholders. “
NEOM’s flagship zero-carbon project, “The Line”, envisages a city of 1 million people operated by smart technology with facial recognition and 5G networks as standard.
“We are fundamentally building the world’s first cognitive city,” Joseph Bradley, head of technology and digital at NEOM and a former CISCO executive, told Reuters, adding that an operating system known as NEOS aims to seek consent to use data from 90% of residents.
This year’s wave of hires will span a variety of professions, from lawyers, accountants and engineers to specialized areas such as advanced robotics and adventure sports, according to Ainslie, who was hired in 2019 by Microsoft Corp
NEOM officials say construction will begin soon on ‘The Line’, a city without cars and roads within NEOM, without specifying a date.
NEOM said in a statement that the prospecting and temporary infrastructure work has already started, and that the permanent works will begin this year, with the first phase completed by 2025.
(additional reporting by Davide Barbuscia in Dubai, Marwa Rashad in London, Paresh Dave in San Francisco and Raya Jalabi in Dubai; Editing by Ghaida Ghantous and Carmel Crimmins)