Neom CEO steps down as Saudi Arabia reduces scope of mega-projects

The longtime chief executive of the $500bn Saudi development project Neom Nadhmi al-Nasr, launched by Crown Prince Mohammed bin Salman, has departed, according to a Neom statement issued on November 12. There was no reason given for his departure, according to a detailed report by The Guardian.

Prince Mohammed has poured hundreds of billions

Prince Mohammed has poured hundreds of billions of dollars into development projects through the kingdom’s Public Investment Fund (PIF) sovereign wealth fund.

Briefhistory of the PIF Fund

The Public Investment Fund is the sovereign wealth fund of Saudi Arabia. It is among the largest sovereign wealth funds in the world with total estimated assets of US$930 billion (£718.2 billion). It was created in 1971 for the purpose of investing funds on behalf of the Government of Saudi Arabia. The wealth fund is controlled by Crown Prince Mohammed bin Salman, Saudi Arabia's de facto ruler since 2015.

Prince’s vision for 2030

Further, the Red Sea mega-project, an urban and industrial development nearly the size of Belgium due to house nearly 9 million people, is central to the prince’s Vision 2030 plan, which aims to diversify the economy away from oil, detailed the Guardian report further.

But some of the schemes have had to be reduced due to rising costs, including the Line, a futuristic city between mirrored walls extending 170km (106 miles) into the desert within Neom. The overall objective behind this is to enhance productivity.

Further, in May, Reuters reported that the $925bn PIF was planning a re-organisation, aiming to increase its focus on investments that have a higher chance of success. Saudi Arabia, the world’s top oil exporter, is still heavily reliant on hydrocarbon revenues, and low oil prices and it is crucial to note that production have dented state coffers.

Aiman al-Mudaifer was named as acting CEO of Neom. He has been the head of the Local Real Estate Division at PIF since 2018 and has a deep understanding of Neom and its projects, detailed Neom’s statement.

“As Neom enters a new phase of delivery, this new leadership will ensure operational continuity, agility and efficiency to match the overall vision and objectives of the project,” the press release reads.

In his role at PIF, Mudaifer oversees all local real estate investments and infrastructure projects, and he is a board member of several prominent companies in the kingdom. Market participants and global investors will carefully follow these developments. They will help them in taking informed investment decisions.