Don't snigger at the giga refigure
Each week our Editor-in-Chief writes exclusively for you, subscribers to this newsletter. Today he looks at Saudi Arabia as it reckons with its giga-project commitments
Hello ,
Much ado in Riyadh – with more to come. Over the weekend it was announced that the hosting of the Asian winter games – due in 2029 at Trojena, near the Jordanian border – is being postponed. The scheme, part of the larger Neom giga-project, had long been known to be overly ambitious.
Trojena joins a curtailed The Line, also part of Neom, in being rationalised. Only the first, 5km phase of the horizontal skyscraper is now due to be built, rather than the fantastical 170km originally envisaged.
Construction problems in big infrastructure are nothing new. Think Berlin Brandenburg airport or the agony that is the UK's HS2 railway. But these schemes can be delivered approximately on time and on budget.
In the case of Saudi Arabia, the slimming of the more outlandish – and thus expensive – of the giga-projects around the kingdom, tracked here by AGBI, is welcome. The more prosaic and beneficial schemes are being favoured.
Take, for example, the King Abdullah Financial District in Riyadh. This, too, was restructured but is now widely admired.
The six lines of the Riyadh metro opened after delays but are a big success. A seventh line is now out for tender.
Roshn, backed by the Public Investment Fund, is building 400,000 housing units across the kingdom. It has awarded contracts worth more than $5 billion at its flagship Sedra development in northern Riyadh.
Qiddiya, an entertainment city being built outside Riyadh, and Diriyah Gate, around the old Al Saud capital, appear to be on track. The first phase of the historical AlUla ecotourism site in the north of the kingdom is now finished.
There is also the interesting idea of regenerating the tired city centres of Riyadh, Dammam and Jeddah, as explained to Shruthi Nair, our multimedia editor.
The question is: what else lurks within the Saudi state's porfolio?
Nearly a year ago AGBI reported that PIF had ordered cuts across more than 100 of its companies to prioritise projects associated with high-profile events, including the Fifa World Cup.
Sindalah, an island resort in the Red Sea that had been under the Neom umbrella, is due to be taken over by Red Sea Global, which is responsible for The Red Sea and Amaala projects.
New Murabba, home of the Mukaab – “the most complex structure known to man” – in Riyadh is also in the frame, according to reports.
For the moment, economists are relaxed about the kingdom's sizeable budget deficit, according to Matt Smith. This is mainly due to a low-ish sovereign debt profile. But the debt markets and ratings agencies may not remain so sanguine in the medium term.
Our columnist Craig Finlayson wrote in December that "the focus [in Saudi Arabia] now isn’t on building everything, but delivering projects with purpose: realistic, well planned, and of global significance." Here's to that.
And let us hope that Trojena is completed one day. The resort, designed to host 30km of ski slopes and lots of snow-making machines, foresees three dams to create its own freshwater lake.
Who can resist an “enchanted forest and adventures on the waterfront” after a day falling over on the slopes of the north of the Arabian peninsular?
