In the first week of March 2026, three separate contractor disclosures landed on the desks of construction industry analysts with a combined weight that no individual filing could carry alone. Webuild, Italy’s largest engineering group, announced that NEOM had terminated its $4.7 billion contract for three dams and a 2.8-kilometre freshwater lake at Trojena. The project had reached 30 per cent completion. Hyundai Engineering and Construction of South Korea confirmed that NEOM had terminated its tunnel construction package, awarded in June 2022 for a 12.5-kilometre section. Malaysia’s Eversendai Corporation reported the cancellation of its structural steel and fireproofing works for Trojena’s Ski Village resort. Combined, the three terminations removed approximately $6.85 billion from active construction.
Each contractor noted, in carefully worded language, that the terminations were exercised by NEOM under contractual rights and would not result in financial losses after settlement of completed works. The diplomatic phrasing obscured the scale of what had happened. In a single month, the Kingdom’s flagship megaproject had cancelled more construction value than most countries spend on infrastructure in a decade.
These were not the first cancellations. They were the most visible in a cascade that had been accelerating since the Public Investment Fund suspended construction on The Line in September 2025. But the March 2026 terminations marked a threshold: the point at which NEOM’s contraction moved from internal programme management to public contractor filings that institutional investors, credit agencies, and sovereign wealth fund analysts could track in real time.
The Audit: What $50 Billion Bought
NEOM’s deputy CEO, Rayan Fayez, confirmed at the World Economic Forum in Davos in February 2025 that the project had spent over $50 billion since its 2017 launch. The figure, which Fayez disclosed with the matter-of-factness of someone describing a quarterly budget, is larger than the GDP of more than 90 countries.
For $50 billion, NEOM has produced: an operational airport capable of handling commercial flights; road networks connecting the project zone; worker housing for the tens of thousands of labourers who built the infrastructure; port facilities on the Red Sea coast; and the near-complete NEOM Green Hydrogen plant, an $8.4 billion joint venture between NEOM, Air Products, and ACWA Power that is 80 per cent finished and on track to produce 600 tonnes of green hydrogen daily from 2027.
It has also produced 2.4 kilometres of foundation work for The Line — approximately 1.4 per cent of the planned 170-kilometre structure. No above-ground superstructure exists. The population target for 2030 has been reduced from 1.5 million to fewer than 300,000. An internal audit first reported by Bloomberg projected that completing The Line to its original specification would cost $8.8 trillion and take until 2080.
Sindalah, the luxury island resort in the Red Sea, remains in active development and is the project component closest to welcoming guests. As of March 2026, it had yet to receive a single paying visitor from the general public.
McKinsey and Company, NEOM’s principal strategy consultant, has earned over $130 million per year in advisory fees, according to reporting by TechCrunch. The firm’s role in shaping NEOM’s original scope — including the 170-kilometre linear city, the mountain ski resort in a region where summer temperatures exceed 30 degrees Celsius, and the floating industrial platform — has attracted scrutiny as each element has been scaled back or suspended.
The Trojena Question
The cancellation of Webuild’s Trojena contract deserves specific examination because it resolves a question that had hung over Saudi Arabia’s sporting ambitions for months.
Trojena was designed as a mountain tourism destination within NEOM, featuring a ski resort, a freshwater lake, luxury hotels, and year-round outdoor recreation facilities. Saudi Arabia won the right to host the 2029 Asian Winter Games at Trojena — a decision that required the construction of competition-grade ski infrastructure in a desert mountain environment.
Industry observers had estimated that Trojena would need $3-4 billion in construction awards within six months to have any realistic chance of hosting the Games on time. Instead, it received $4.7 billion in cancellations. The Games were moved to Almaty, Kazakhstan in January 2026. Saudi Arabia’s response was not protest but quiet acceptance — a reaction that industry analysts interpreted as relief at the removal of an impossible deadline.
The Trojena cancellation also eliminated NEOM’s most environmentally contentious sub-project. The freshwater lake required damming a desert wadi system, the ski infrastructure demanded continuous artificial snow production in ambient temperatures incompatible with winter sports, and the entire concept tested the boundaries of climate engineering in a region already experiencing water stress. Whether or not one accepts the environmental critique, the economic case for a desert ski resort was always subordinate to the prestige case. When prestige became unaffordable, the project lost its rationale.
What Survives and Why
The pattern in NEOM’s contraction is not random. Every component that survives has one characteristic in common: it generates returns independent of the megacity concept.
The Green Hydrogen plant produces a commodity — green ammonia — that global markets will buy regardless of whether NEOM becomes a city. The airport serves the Red Sea coastline. Sindalah targets luxury tourism with or without The Line behind it. The road and port infrastructure has standalone utility.
Everything that has been cancelled or suspended was dependent on the integrated city thesis — the idea that 9 million people would live in a 170-kilometre mirrored structure, that they would need a ski resort, a freshwater lake, a floating industrial platform, and a giant cube in the desert. The integrated thesis required all components to succeed simultaneously. When any single element failed — and the fiscal environment forced multiple elements to fail at once — the interconnected system collapsed.
PIF Governor Yasir Al Rumayyan’s revised 2026-2030 strategy, expected in spring 2026, is reported to centre on AI infrastructure, mining, food security, and defence logistics. None of these require The Line. All of them can use NEOM’s existing infrastructure — the airport, the roads, the port, the power grid being built for the hydrogen plant — without the residential megacity that was supposed to justify them.
The NEOM Stadium, planned as a World Cup 2034 venue sitting 350 metres above ground within The Line’s architectural envelope, creates an interesting minimum viable product for the first district. FIFA’s deadline forces the construction of at least one functioning section of The Line by 2032 — a sports neighbourhood with transport, accommodation, and an airport. It is, paradoxically, the most realistic version of NEOM: not a 170-kilometre city, but a stadium district that happens to sit inside the shell of one.
The Contractor Fallout
The $41 billion reduction in PIF construction commitments has redistributed risk across the global engineering industry in ways that are only now becoming visible.
Bechtel, Fluor, and AECOM had collectively won or were in final-stage negotiations for an estimated $4-6 billion in NEOM construction packages. Several of those packages have been suspended, reduced, or rebid at significantly lower values. None of these firms derives the majority of their revenue from Saudi Arabia, but the loss of anticipated NEOM contract volume represents a negative revision to 2026-2027 backlog growth projections.
DSV, one of the world’s largest logistics groups, holds a 49 per cent stake in a $10 billion joint venture with NEOM for exclusive logistics and transport services until 2055. The venture is not operational. DSV capped its spending at $100 million in 2025 as project timelines slipped. CEO Jens H. Lund told shareholders that the ramp-up at NEOM had been slower than expected. The joint venture’s status — capital committed, contracts signed, returns pushed further into the future — epitomises the position of private sector partners who bet on the original timeline.
The contractor community has responded with a pragmatism that mirrors the Kingdom’s own adjustment. Companies are pivoting from NEOM packages to FIFA World Cup stadium construction, Expo 2030 infrastructure, and the data centre buildout that HUMAIN and SDAIA are driving. The Saudi construction market has not shrunk — it has rotated. The firms that can rotate with it will recover their order books. Those locked into NEOM-specific contracts face writedowns.
The $50 Billion Question
The Saudi government’s official position remains that NEOM is a 50-plus-year project. Finance Minister Mohammed Al-Jadaan told the Future Investment Initiative in 2024 that anyone expecting NEOM in its grand size to be built, fully operational, and profitable within five years was foolish. The framing is technically defensible. Multi-decade infrastructure programmes routinely experience scope adjustments, cost overruns, and phasing changes.
But $50 billion over nine years for an airport, some roads, worker housing, and a hydrogen plant that was always a separate joint venture is not a scope adjustment. It is a fundamental repricing of what NEOM was supposed to be versus what it delivered. The green hydrogen facility alone accounts for approximately $8.4 billion of committed investment. The remaining $41.6 billion produced infrastructure that serves as the foundation for a city that may never be built at the originally envisioned scale.
The Tadawul held steady through the March contract cancellations. Institutional investors had already priced in NEOM’s contraction because PIF’s own financial disclosures — the $8 billion write-down, the giga-project share declining from 8 per cent to 6 per cent of total assets — had telegraphed the adjustment months in advance. The market’s non-reaction was itself the verdict: NEOM’s original scope was a sunk cost. The PIF’s pivot to assets that generate returns — AI compute, hydrogen, minerals, World Cup infrastructure — is what kept investor confidence intact.
The desert of Tabuk province remains. Twenty-six thousand square kilometres of mountains, coastline, and sand where Saudi Arabia planned to build a civilisation from nothing. Most of this territory was never developed. What stands there now — an airport, a hydrogen plant nearing completion, the foundations of a stadium, and the 2.4-kilometre scar of a linear city that reached one-fiftieth of its planned length — is the physical record of the most expensive architectural ambition in modern history.
It is also, in its reduced form, possibly the most honest version of what sovereign capital can actually build when gravity, budgets, and Iranian missiles intervene.
This analysis draws on contractor filings from Webuild, Hyundai E&C, and Eversendai; PIF annual reports and financial disclosures; reporting by Bloomberg, the Wall Street Journal, AGBI, CNBC, TechCrunch, Zawya, Gulf Business, Middle East Eye, the Financial Times, and Arabian Business; and data from the IMF, NEOM, and the Saudi Ministry of Finance. Vision2030.AI is editorially independent and is not affiliated with NEOM, PIF, or any official Vision 2030 entity.