Saudi Arabia’s construction of the £400 billion futuristic megacity Neom has been delayed due to plunging oil prices and coronavirus fears hitting the land of billionaire princes, the Daily Mail reported.
The futuristic tech-hub was set to be completed in 2025 and be home to one million people, costing an estimated $500 billion.
The complex of Moroccan-style opulent buildings and palaces is planned to include helipads, a marina and a golf course and be lit by a giant artificial moon.
But plummeting oil prices and a coronavirus-led economic slump forced the Saudi government to introduce austerity measures last week, putting Neom’s future at risk, the Times reported.
So far only a few palaces and helipads are reported to have been built in Neom, which is named after the Greek word for ‘new’ and the Arabic for ‘future’.
A Neom contractor is reported to have cut the working hours of some staff by half.
“All of these projects will be delayed,” said Ali Shihabi, a Washington-based analyst on the Neom advisory board. “It’s not paused; it’s continuing more slowly.”
This comes after the Saudi government announced plans last week to triple Value Added Tax (VAT) from 5% to 15% last week and halt handouts to citizens, as part of the new austerity measures.
“It has been decided the cost of living allowance will be halted from June 2020 and VAT will be raised from five per cent to 15 per cent from 1 July,” Finance Minister Mohammed al-Jadaan said in a statement released by the official Saudi Press Agency.
Jadaan insisted the measures were necessary to shore up state finances amid a ‘sharp decline’ in oil revenue as the coronavirus pandemic saps global demand for crude.