Vision 2030: an update

With the announcement at the end of last year of its alliance with one of Saudi Arabia’s leading law firms, Fenwick Elliott continues to grow in the Middle East. In this article, James Mullen looks at the current status of Saudi Arabia’s “Vision 2030”, a plan which comprises some of the most exciting and ambitious construction projects ever undertaken on the global stage.

In November 2019, Fenwick Elliott took a significant step in its continued growth in the Middle East when it announced its new alliance with one of Saudi Arabia’s leading law firms, Hammad & Al-Mehdar.

There are exciting times ahead in Saudi Arabia when it comes to construction, with the Kingdom’s “Vision 2030” comprising some of the largest and most ambitious plans for construction, infrastructure and energy projects ever undertaken on the global stage. 

Announced in 2016, Vision 2030 is the vision of Saudi Arabia’s Crown Prince Mohammed bin Salman and is an ambitious long-term plan to diversify Saudi Arabia’s economy to make it less reliant on oil, to encourage foreign investment and to improve key sectors such as energy, technology and tourism. 

Vision 2030 includes several “giga-projects” such as Qiddiya, a vast sports and entertainment complex to be constructed outside Riyadh with the aim of being the world’s largest entertainment city which will include sports facilities, a motor race track, an arena, a safari park and a theme park. It is currently expected to cost more than US$15bn.

Other giga-projects include tourism and hospitality developments around the Red Sea, including the construction of resorts, hotels, villas, retail, marinas and commercial airports for the region.

However, the centre piece of Crown Prince Mohammed bin Salman’s Vision 2030, and perhaps the most ambitious of the giga-projects, is Neom which is being billed as a smart city for the future.

The Neom project was first announced in 2017 and takes its name from a combination of the Greek word for “new” and the Arabic term for “future”. 

Neom will be built in the Tabuk region of north-western Saudi Arabia on the Red Sea. It is intended to be 33 times the size of New York City and cover an area the size of Belgium, occupying a total of 26,500 km2 along 468km of waterfront. It will comprise various hyperconnected, cognitive towns and cities, ports, research centres, sports and entertainment centres and tourist destinations. 

It has been reported that some of the more outlandish ideas for Neom include things such as a huge artificial moon, glow in the dark beaches, flying drone-powered taxis, robotic butlers to clean the homes of residents and a Jurassic Park-style attraction with animatronic lizards. 

The intention is that Neom will be an international city. The Neom website says that due to its location, 40% of the world’s population will be able to reach it in less than four hours. The plan is for there to be more than one million people, both Saudis and expatriates, living and working in Neom by 2030.

Perhaps to make them more appealing to foreigner investors, it has been said that the new economic cities that are to be constructed as part of Vision 2030, such as Neom, will be subject to their own judicial and regulatory systems. Precisely how economic cities such as Neom will be regulated remains to be seen but it seems that foreign investors will have input in the drafting of Neom’s regulations and legislation.

The Neom website says that “NEOM will provide a regulatory framework that is conducive to investors’ participation through their inclusion in the drafting of regulation and legislation” and that Neom will be “supported by a progressive law compatible with international norms and conducive to economic growth”.

As one would expect, the Neom project is not going to be cheap. Saudi Arabia’s Public Investment Fund (PIF) will be investing US$500bn into the Neom project although it is hoped that it will also attract foreign investment (which is part of Vision 2030’s aim). The Neom website says that “while Neom is being driven and initially funded by Saudi Arabia, it is an international project that will be led, populated and funded by people from all over the world”. 

Therefore, Neom should represent potential opportunities for international construction companies. 

Understandably, it has been questioned recently whether projects such as Neom are still viable in the current economic climate, with Saudi Arabia dealing with the financial consequences of the global coronavirus pandemic and low price of oil which remains the Kingdom’s primary export.  

Not withstanding these issues, it appears that Saudi Arabia and Crown Prince Mohammed bin Salman remain committed to moving forward with the Vision 2030 giga-projects, including Neom. 

In July 2020, the Qiddiya project announced that it had issued a contract worth approximately US$187m to Saudi firm Shibh Al Jazira Contracting Company (SAJCO) for the construction of major stormwater drainage, roads and bridges.

Around the same time, the Red Sea development announced that it had awarded a contract to a joint venture between Saudi contractors Nesma & Partners Contracting Co. Ltd and Almabani General Contractors for the construction of airside infrastructure works at an international airport being designed by Fosters + Partners which is intended to serve one million tourists per year by 2030. 

On Neom it was announced in August 2020 that global US construction company Bechtel had been hired for executive project management work for the development of Neom’s primary base infrastructure. Bechtel’s website says that the company has been selected to “oversee and create resource-efficient utilities and a highly advanced transport system to connect Neom’s cognitive cities”. 

Other contracts recently issued for Neom include one with Saudi telecom giant, STC, for the establishment of a 5G network for the city and a US$5bn partnership with US-based Air Products and Saudi Acwa Power to develop the world’s largest green hydrogen and green ammonia plant which it is hoped will be operational in 2025.

So for now it seems that Saudi Arabia is continuing with its Vision 2030 projects, notwithstanding the problems that it, like most countries, has experienced over the past year. It will be interesting to see the progress that has been made on the giga-projects, including Neom, Qiddiya and the Red Sea developments, this time next year. 

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