Saudi Arabia’s orientation towards intensifying investment in qualitative development of infrastructure and expanding the base of manpower and skilled minds is evident in the designs of NEOM’s project The Line, experts told Asharq Al-Awsat.
On Monday, Crown Prince Mohammed bin Salman, who is also the chairman of the NEOM Board of Directors, announced the designs of The Line, the city of the future in NEOM.
The Crown Prince revealed that flagship project NEOM, a huge economic zone eventually meant to house nine million people, will be partly financed through a flotation expected in 2024.
Speaking to journalists after announcing the designs of The Line city in the $500 billion NEOM project, the Crown Prince said the offering process will add to the size of the Saudi stock market at least $320 billion (1.2 trillion riyals) at the beginning, and the total will increase after the completion of the project above $1.3 trillion (five trillion riyals).
The Crown Prince explained that the first phase of “The Line” will involve $320 billion (1.2 trillion riyals) until 2030, and there will be government support worth $53 billion to $80 billion (200 to 300 billion riyals), pointing out that government support differs from the fund’s investment, which amounts to about $133 billion (500 billion riyals).
He added that work is still underway on the internal interest rate, which is likely to be from 9% to 16%, indicating that NEOM aims in the end at a return on investment of 13%-14%.
Moreover, the goal for 2030 is to have 50 million people — half Saudis and half foreigners — living in the Kingdom, up from roughly 34 million today.
Majid Al Hokair, General Manager and CEO of Abdul Mohsin Al Hokair Company, told Asharq Al-Awsat that the The Line project is racing against time with its impressive designs that simulate the future of humanity.
Hokair said that the project’s designs represent a civil revolution and speak to Saudi Arabia’s progress in the field of qualitative development and expansion of the base of manpower and skilled minds.
The Line will eventually accommodate nine million residents and will be built on a footprint of 34 square kilometers, which is unheard of when compared to other cities of similar capacity. This in turn will reduce the infrastructure footprint and create never-before-seen efficiencies in city functions.
According to Hokair, The Line’s designs are aligned with the Kingdom’s goals of attracting 100 million visitors by 2030.
Hokair added that the project is characterized by its strategic location and suitable terrain.
Also, it takes advantage of the latest technologies, construction, and manufacturing processes with the concept of digital transformation, to achieve the ideal standards of living and address the challenges facing humanity.
Muhammad Al-Shamimary, Director General of the Muhammad Al-Shamimary Financial Consulting Office, said that NEOM will add to the Saudi market a significant value of about 1.2 trillion rials ($320 billion dollars).
Al-Shamimary noted that NEOM’s IPO will bring back the memory of the largest IPO in history, made by Saudi Aramco, whose market value today reached 8.5 trillion riyals ($2.2 trillion).