“Rome was not built in a day,” the saying goes, and it is obvious that the challenges of building a new metropolis from scratch are enormous.
Most of the great urban centers of the world were organic in their development, usually beginning as natural centers for habitation and sustenance before growing to become dynamic and self-sustaining hubs, acting as economic, commercial and administrative magnets for their regional hinterland.
That is why NEOM, the 21st century metropolis planned for north-western Saudi Arabia, is such a revolutionary concept. NEOM is approaching the challenge of urban development from the other direction, by first taking an appropriate geographical location and then designing a city around it, with all that entails: Infrastructure, transport systems, human environment and the other essentials of urban life.
On top of this, NEOM is aiming to be a global center for technology and innovation, with hyper-connected communities living and working in an environmentally sustainable ecosystem that does not add to the pollution of the planet.
On Sunday, Saudi Crown Prince Mohammed bin Salman announced The Line, a 170-km-long strip that will form the backbone of the NEOM development, driving a pathway of modern development from the Red Sea to the desert valleys at the eastern end of the NEOM development zone.
It is important to realize that NEOM will be much more than The Line. The total development, at a total of 27,000 sq. km, is the equivalent of a small country, and will have within it all the essentials for a self-sustaining economy such as industry, agriculture, energy generation and utilities provision. It will be a global destination too, as a transport and logistics hub for the Middle East and an important aviation link for business and tourism.
But The Line will be its backbone, the urban focus of the whole development and the showcase for the wider project.
New cities of the past, such as Brasilia in Brazil or Canberra in Australia, were imagined as centers of government and administration rather than complete urban environments. Even Washington, DC — a new city in the beginning of the 19th century as the center for the federal government — took a long time to become the genuinely thriving metropolis it is today.
This encapsulates the unique challenge facing the master builders of NEOM. Not only are they attempting to build a new urban metropolis from a greenfield site, they are planning to do it in superfast time under the Vision 2030 strategy.
In addition, and crucially, they will need to finance that development in a sustainable and rational manner from the outset.
This is unique in history. Nobody sat down on Manhattan Island in the 17th century and added up the bill for building the future city of New York, nor were any other great cities put through a process of cost-benefit analysis from the outset.
NEOM’s policymakers find themselves having to fund the project from the outset. This requires making a solid business case to investors, including the government of Saudi Arabia, which will put up the bulk of the funds in the form of equity investment, at least in the early phases.
Thereafter, private and international investment will increasingly take a more prominent role, it is envisaged, as the global financial system becomes increasingly sold on the NEOM concept and — just as important — convinced about the rate of return on their investments.
The crown prince told broadcasters that The Line alone would cost between $100 billion and $200 billion, with the Public Investment Fund playing a big part in that.
Several big corporate and investment partners are already involved and invested in various aspects of The Line. But the serious work of explaining to the global financial community a detailed business case and investment rationale for the ambitious development now begins.
- Frank Kane is an award-winning business journalist based in Dubai. Twitter: @frankkanedubai
Disclaimer: Views expressed by writers in this section are their own and do not necessarily reflect Arab News' point-of-view
Copyright: Arab News © 2021 All rights reserved. Provided by SyndiGate Media Inc. (Syndigate.info).