Saudi Arabia’s construction of the £400 billion futuristic megacity Neom has been delayed due to falling oil prices and fears of coronavirus hitting the country of billionaire princes. The futuristic technology center was to be completed in 2025 and would house a million people, at an estimated cost of $ 500 billion (£ 413 billion).
The complex of opulent Moroccan-style buildings and palaces should include helipads, a marina, and a golf course, and be lit by a giant artificial moon. But the drop in oil prices and an economic crisis caused by a coronavirus forced the Saudi government to introduce austerity measures last week, endangering the future of Neom, the Times reported.
Construction of futuristic £ 400 billion mega-city Neom is in danger as the Saudi government delayed work due to falling oil prices So far, only a few palaces and helipads have been built at Neom, which is named after the Greek word for “New” and the Arabic for “Future”.
A Neom entrepreneur is said to have cut the work hours of some employees by half. “All of these projects will be delayed,” said Ali Shihabi, a Washington-based analyst on the Neom advisory board. “It’s not a break; it continues more slowly.
This comes after the Saudi government announced last week its intention to triple the value-added tax (VAT) from 5% to 15% last week and to suspend payments to citizens, as part of the new measures. austerity. “It has been decided that the cost of living allowance will be suspended from June 2020 and the VAT will drop from 5% to 15% from July 1,” said Finance Minister Mohammed al-Jadaan in a statement. by the official Saudi press agency.
Jadaan insisted that the measures were necessary to consolidate public finances amid a sharp drop in oil revenues as the coronavirus pandemic undermines global demand for crude.
Neom contractor reportedly cut some workers’ work hours by half as it is reported that work on the megalopolis will continue more slowly.
This comes after the Saudi government announced plans to triple the value-added tax (VAT) from 5% to 15% last week as part of austerity measures due to an economic crisis caused by a coronavirus.
The petro-state also announced that it would cut domestic oil prices by 50% after Jadaan warned of painful and drastic measures to cope with the double shock of the new coronavirus and save prices for low oil.
Neom is expected to extend across the border of the Tabuk region with Jordan and will function both as a tourist destination and as a “Smart City”. It would operate independently of the rest of the country, with different laws for workers and women’s rights, and give more freedom to visitors, such as the right to drink alcohol. The futuristic city will force the Howeitat tribe, who have lived in the region for hundreds of years, to move.
Last year, analysts expressed concern that the project may create funding pressures as the government faces a wide-ranging budget deficit and that growth in the kingdom’s non-oil economy remains slow.