Construction contracts for US$500 billion city

By Andy Brown15 June 2022

What Oxagon in Saudi Arabia may look like - the floating city is planned to be part of NEOM

Drill and blast tunnelling contracts for work on the infrastructure of Saudi Arabia’s new city in the desert, NEOM, have been awarded.

The estimated cost of NEOM, which is to be built in the north west of Saudi Arabia is US$500 billion. The initiative emerged from Saudi Vision 2030, a plan that seeks to reduce the country’s dependence on oil, diversify its economy, and develop public service sectors. 

Two joint venture groups will undertake the project, which is separated by lower and upper geographies, with the first contract awarded to FCC Construction SA/China State Construction Engineering Corporation/Shibh Al-Jazira Contracting Company Joint Venture.

The second contract was awarded to Samsung C&T Corporation /Hyundai Engineering and Construction Co. Ltd/Saudi Archirodon Company Ltd Joint Venture.

The tunnels work will provide over 28km in length and provide separate tunnels for high-speed and freight rail services – making the movement of people and goods faster, safer and easier.

The rock excavated as part of this tunneling project will be processed for subsequent reuse within the permanent concrete lining of the tunnels and other projects within NEOM to ensure minimal impact to natural landscapes.

Nadhmi Al-Nasr, CEO of NEOM, said, “Today marks yet another significant milestone for NEOM. The sheer scope and scale of the tunneling work to be undertaken highlights the complexity and ambition of the project.”

The project has experienced numerous problems – in 2020 Government ministries in Saudi Arabia cut spending by 20% due to the collapse in oil prices triggered by the fall in global demand due to the Covid-19 pandemic, putting the project in doubt. Several firms in the construction industry have also stopped working with Saudi Arabia due to the country’s human rights violations.

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