Categories: TECH

Neom is reportedly turning into a financial disaster, except for McKinsey & Co.


A new WSJ report suggests that Saudi Arabia’s now eight-year-old Neom project — a futuristic, carbon-neutral, 105-mile-long linear city envisioned by Crown Prince Mohammed bin Salman — has become a financial sinkhole.

Plagued by delays and cost overruns, the country, which has already shelled out $50 billion, could reportedly face another 55 years of construction, with an astonishing projected cost of $8.8 trillion, according to an internal audit presented to Neom’s board last summer. That’s more than 25 times Saudi Arabia’s annual budget, notes the Journal.

The situation is starting to resemble Saudi Arabia’s own Waterloo, with MBS misjudging the monumental challenges inherent in his strategy, much like Napoleon did before him. Among the harsh realities threatening to derail the project are insufficient labor, inadequate roads, and a lack of electricity.

There are some winners, however. Consulting giant McKinsey & Company is reportedly earning more than $130 million annually for its services, despite some controversy surround its role, given the firm’s involvement in both the planning and validation of some of the project’s financial projections, per the story. A McKinsey spokesman tells the WSJ the firm has “strict protocols to prevent conflicts of interest in our engagements.”



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