Neom - The Line - The Rise and Fall of Saudi Arabia's Linear City.

Saudi Arabia’s plan to build a 170km long, 500m tall, mirrored city in the desert, filled with 9 million people has been curtailed to 2.4km long.

According to Bloomberg, Saudi Arabia’s government had “scaled back its medium-term ambitions” for Neom, of which The Line is the most significant sub-project.

The Saudi government had hoped to have 9M residents living in The Line by 2030, but this has been scaled back to fewer than 300,000, according to the report.

The curtailment of plans comes as Saudi Arabia has not yet approved the 2024 budget for Neom, according to Bloomberg.

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Transcript

Neom – The Line is a 170-kilometer-long city being built in the deserts of Saudi Arabia that was supposed to cost two hundred billion dollars to build. It would accommodate 9 million people in a massive structure that is 200 meters wide and 500 meters tall. It is conveniently located in an allegedly empty area of desert. 

The Line has been pitched as a smart city complete with “extreme technology” including all of the modern features you would want like an artificial moon, robot dinosaurs, flying cars, human gene editing and glow-in-the-dark sand among many other attractions...

According to a Wall Street Journal article about the project, “This corner of Saudi Arabia is so barren that the only abundant resources that a group of consultants could identify were sunlight and “unlimited access to salt water.”

Now, let’s not be negative about this. Location is not the only consideration in a real estate project.  I’m reliably told location is only one of the three important factors.  There are at least two other important factors that need to be considered.

Now, I won’t lie… I’m a bit nervous about making this video, and I hope that nothing that I say is viewed as criticism – I’m really just telling you the news about the scaling back of this obviously great project.  You might be aware that things didn’t work out very well for the last guy who questioned the wisdom of building a 170km long 200 meter wide city in previously overlooked prime location. [Jamal Khashoggi Clip]

I might have to lie low for a while after this video is released… and obviously I won’t be accepting any embassy invitations – no matter how many Ferrero Rocher’s I’m offered.

[Ferrero Rocher Clip]

Now, I know that I have mentioned this project in prior videos – and I hope that nothing from those videos will be misinterpreted as criticism [Old Clip].  Oh OK, yeah so that could sound like criticism – but I’m not even sure if that was even me, it might have been made using AI.  I don’t even really cover topics like that on this channel – My videos are mostly about rap and rapping – My goal is to be the number one crypto nerd gangster rap channel on YouTube, but sometimes I get distracted by other topics.

So, anyhow, Bloomberg reported this week that Saudi Arabia is scaling back its medium-term ambitions for Neom – The Line. 

They say that the pullback comes as the kingdom’s sovereign wealth fund has yet to approve Neom’s 2024 budget, and that the financial realities of the trillions of dollars of investment are starting to cause concern at the highest levels of the Saudi government as it tries to fulfill its ambitious Vision 2030 program to diversify the kingdom’s economy away from fossil fuels.

Bloomberg reports that the Saudi sovereign wealth fund’s cash reserves have fallen to $15 billion dollars as of September — the lowest level since 2020.

The Line city – according to the latest reports is now only expected to extend 2.4 kilometers and house 300,000 people by the end of the decade. This is a 98.6% reduction from the initial plans… So, it is still going ahead, it’ll just be a bit smaller than had been hoped for.

While building an unusually densely populated 170km long city – that is as tall as some of the tallest buildings in the world in what is described as a harsh, dry desert with great temperature extremes – strikes me as a great idea, other people have not been as positive about these plans. 

In 2017, King Salman reshuffled Saudi Arabia's succession order, replacing his nephew who had been the first in line to the throne with his son Prince Mohammed (who is known as MBS) – which long term viewers of the channel will know stands for Mortgage Backed Securities – but which also stands for Mohammed Bin Salman – so it’ll be one of those... 

Four months after his appointment, MBS unveiled his plans for Neom, The word ‘NEOM’ is an amalgamation of the Ancient Greek word for ‘new’ and the Arabic word for ‘future’

The project is being overseen and financed by the Saudi Arabinan sovereign wealth fund which the crown prince also chairs. It was pitched as costing two hundred billion dollars, but – upon reflection - might cost a bit more than that.

Last month a construction update was released on the Neom YouTube channel. [Construction Update]

Some people would say that a lot of that construction work looked like CGI – but not me. It looked very realistic to me, and the man in the video said that a lot of the foundation work has been done “literally and figuratively” and there is no reason to believe that he would mislead us.  It has definitely been done – both literally and figuratively.

It is good to hear that a lot of work has been done, as people are scheduled to move in any day now. [Clip - Opening Date 2024]

Now look… a lot of people have commented on the shape of the city – which is quite unusual.  Off the top of my head, I can’t think of any other cities that are 170 kilometers long while only 200 meters wide and 500 meters tall.  In fact I struggle to think of any cities that are taller than they are wide…

Historically, skyscrapers have been built in very dense urban locations where the price of land is so high that it makes economic sense to build upwards to minimize the cost of the land per the total floor area of a building. But you can also build them in an area so barren that the only abundant natural resources are sunlight and unlimited access to salt water as, who are we to criticize the judgement of a crown prince – who was likely appointed by God.

There are experts in urban planning – or heretics as I like to call them - who study the shape of cities, I found a paper by Brinkley and Raj which explains that in open systems, perfusion guides form and growth. They explain that ecosystems grow as fractals with new branches sprouting in order to maximize perfusion and resource uptake.

They go on to explain that most cities grow as fractals, branching out, maximizing the urban interface with available fuel and arable land. They argue that cities are like cells suspended in a growth medium – the growth medium being arable land, and the urban fabric grows to maximize perfusion.

Now, all of these points make sense if you are building a city anywhere near things like water, arable land or any other resources necessary for human life, but it is my considered judgement that when building in an unhospitable environment like a desert, or on the surface of a distant planet – the longer and taller a city is the better.

So, while most cities are circular, because they grow to interact with food, water, trade and commerce, MBS came up with a long narrow and very tall city in an unhospitable part of the world, and that is probably also a very good idea.  In fact, it definitely is…

If you think about it, if the first building is in a questionable location, it makes good sense for the one next to it to be a bit away from that location, and the city would naturally form a line as it tries to get away from itself…

Now, the argument has been made (by possibly someone impersonating me using AI) that a long narrow city guarantees that inhabitants are always the maximum distance from wherever they need to go, but… the designers of “The Line” do have a solution for that problem.

[Clip] [The lines infrastructure makes it possible to travel end to end in 20 minutes – with no need for cars resulting in zero carbon emissions]

Now, this train system is very impressive. To travel 170 kilometers in twenty minutes you would have to be travelling at 510 kilometers per hour, which is a bit faster than the world’s fastest train. 

Of course, 510 kilometers per hour assumes no stops along the way – which might be a bit inconvenient for people who live near the middle of the city.

London underground stations, and New York Subway Stations are usually about a quarter of a mile apart from each other.  170 kilometers is 105.6 miles, so The Line would need 412 train stops along the way.  

Subway trains usually stop and open their doors for at least 30 seconds at each station so with 412 stations the train would be stopped for 206 minutes allowing people to get on and off the train at the stations.  206 minutes is (of course) a bit more than 20 minutes, so people would need to get on and off the trains a bit quicker than that.  If the train stopped for just two seconds at each station – the train would only be stopped for 14 minutes, leaving us with 6 minutes to travel 170 kilometers so we would just have to travel at a thousand seven hundred kilometers per hour which is a bit over 1000 mph. 1000 miles per hour would (of course) be an average speed, and there would be a lot of extreme acceleration and deceleration going on, meaning that the top speed would have to be well above 1000MPH.  You would have two seconds to get on or off a train that would quickly accelerate up to let’s say three times the speed of sound before slamming on its brakes for the next station.  I won’t lie to you, it sounds a little bit stressful to me, you would have to get your seatbelt on rather quickly... [Kingsman Clip] 

Now, what could possibly go that fast?  Oh yeah – of course – Elon Musk’s hyperloop. In 2020 it was announced that Hyperloop One had partnered with Neom. [Elon Musk: “It’s like a tube with an air hockey table – I swear, It’s not that hard”] 

Oh, but hold on… It was just announced a few months ago that Hyperloop One is actually shutting down.  That’s probably what’s holding things up at Neom.  I’m sure though, that someone else could build one – it can’t be that hard… [Clip] [Elon Musk: “It’s like a tube with an air hockey table – I swear, It’s not that hard”] 

It doesn’t really matter to me,  I’d probably just get about in one of those Autonomous flying cars that they show in the video – that’s basically how I get around anyhow.  The rest of you should probably just walk [five minute walk neighborhoods clip] Most people will want to walk anyhow rather than risk getting stuck in the door of the hyperloop. [clip]

Ali Shihabi – one of the project advisors explained to The FT that Westerners don’t necessarily get the project. [Clip Substance Below this]

When asked if he would like to live at Neom, he replied [clip][I’m too old for the line, I think the line will attract Saudis in their 20’s and their thirties]

I have to agree with Ali there, getting on and off the hyperloop within that two second window is a young mans game.  You have to be in the prime of life to be able to handle the g forces as it accelerates to mach 3 and then slows to a full halt 412 times in a single twenty-minute journey.  It’s not for me either…  

The line is going to be a fairly busy city, nine million people will be living on a footprint of just 34 square kilometers – which is thirteen square miles.  Manilla in the Philippines has the world’s highest population density with 119,600 people per square mile. Neom would have 686 thousand people per square mile which is almost six times the population density of Manilla.  I feel there would be a real sense of community there.

The line is expected to be quite a place. In 2019 the Wall Street Journal reviewed 2,300 pages of documents put together by consultants at BCG, McKinsey and Oliver Wyman. 

The consultants were directed by MBS, to help turn his idea into a reality and the documents highlight that the project is so ambitious that it incorporates many technologies that don’t yet exist.

There will be flying taxis, cloud seeding – to make it rain – in the desert, robot maids (which didn’t exist at the time, but were since invented by Elon Musk). Scientists at Neom will work on a project to modify the human genome to make people stronger – which is surprising… There will be a robotic dinosaur park (which is probably safer than an actual dinosaur park), robotic cage fighting – yeah… there will be a lot of robots – hopefully they don’t start fights with the maids… A giant artificial moon will light up each night and live-stream images from outer space, acting as an iconic landmark.

But, that’s not all, apparently, the crown prince wants a beach that glows in the dark, like the face of a watch- who knows, maybe the radiation from this glowing sand can also modify the human genome…  That would kill two birds with the one stone I suppose. Additionally, Cameras, drones and facial-recognition technology will track everyone at all times – which sounds nice…  These cameras could possibly be useful for keeping track of the people who (unlike me) are critical of the project.  If I moved there, I wouldn’t even have to make these videos, I could just be livestreaming all the time.

The Wall Street Journal piece says that Neom’s reliance on foreign consultants reveals a sensitive challenge for the country as Saudi Arabia historically lacked expertise in planning, engineering and management. I’ll tell you, there is no sign of a lack of those skills in this project plan.  To me, the rest of the world appears to be lagging behind, I can’t think of last time I’ve watched robot fighting on a beach where the sand is glowing like the face of a watch. [Clip – Ignore Nature]

Neom aims to have “zero work or stress-related diseases,” according to the documents with residents all working at startups. While Neom is in the middle of the desert, it will have numerous farmers markets.  I’m not sure how far the farmers will have to travel, or if they will come and go by hyperloop.  I’d worry a bit about growing vegetables in the glow in the dark sand – which otherwise sounds lovely.

The plans detail how the city will have schools with classes taught by holographic teachers – which seems like a bit of a disappointment when you have all of these robots kicking around, but OK.

Look there is going to be a lot of tech at NEOM…[clip ventilation and water]

It is good that they have worked out the ventilation and water thing as this is in the middle of the desert and Saudi Arabia – interestingly enough has no permanent rivers or lakes and has very little rainfall. NEOM’s water needs will be provided by desalination plants.

NEOM will include an eight-sided buoyant city that will float on the Red Sea, it will have its own judiciary system, entirely automated using AI. ‘The Line’ has even unveiled its own metaverse platform [Clip Metaverse]

There will be a digital asset marketplace for crypto and NFT trading, and a mixed reality social media experience. It just sounds great!

The consultants allegedly worked on all of these ideas along with a plan for how local tribes would be forcibly relocated. [Virgin Territory]

According to the Guardian, Saudi authorities are accused of illegally displacing tribespeople in the region, often without adequate compensation, and of violently cracking down on those who peacefully oppose or resist eviction.

They report that in 2020 a tribesman was shot dead after refusing to give up his land for the project and that three tribesmen who live in the region - today face execution after reportedly being arrested for resisting eviction. Another three were sentenced to between 27 and 50 years in prison.

According to the Saudi tourism board, while tourism in Saudi Arabia was a pipe dream only a few years ago, ambitious projects like Neom and The Line, will draw huge crowds to the country. 

I know that when I think of a good place to go on holiday, I always search for the most authoritarian theocratic dictatorship in the world.  Especially when they’ve built a new city with cameras, drones and facial-recognition technology to allow intelligence services to track everyone at all times to keep them safe…  I’m sure you feel the same.

Look, the best reason for building “the line” (which should definitely be built – in full) is not just that it’s a great idea, but it’s a really good deal.  MBS negotiated a bargain price on this project.

The Line is going to be 500 meters tall, which is about the same height as Taipei 101 – which was the tallest building in the world when it was built twenty years ago at a cost of just under two billion dollars.  Taipei 101 is 75 meters wide, so you would need to build 13.3 of these for each kilometer. 2270 of these buildings would equal just one wall of the line. For both city walls you would need 4540 Taipei 101’s, and that’s just the external walls.  There are still all the inner buildings, the hyperloop, the floating gardens, the autonomous flying pods and the artificial moon.  

Let’s not forget power plants, water desalination plants, airports, sewage treatment, human gene editing facilities and everything else needed for a modern city.

The Line will have about half of the population of New York City, and thus should require around 5000 megawatts of power per day. It might need a lot more than that as water desalination is very energy intensive, and being based in the desert, people might want to run their air conditioners most of the time.  According to the New York Times, New York City requires hundreds of power plants to run, but gets around one third of its power from four nuclear power plants. Let’s say the Line is a very energy efficient city and can get by on one third of the power consumed by New York City. You would then need to build four or five nuclear power plants to supply that power.

Synapse Energy estimates that each power plant would cost between 6 and 9 billion dollars, so we are looking at 30-40 billion dollars just for the power plants to supply electricity. Now, I’m not saying that they will use nuclear power to generate electricity for Neom – the plans just say that the source of power will have zero-carbon impact, and it appears that they are looking at a mix of energy sources. Obviously different sources of power have different costs, but bringing enough electricity online to power a city of nine million people in a desert will be expensive.

The 4540 Taipei 101 buildings needed just as the exterior walls for the line would cost 9.1 trillion dollars – assuming that construction costs have not gone up in twenty years – which they probably have… MBS was initially going to build all of this for 200 billion dollars, which is less than 2% of the cost I have estimated for just the walls. This is obviously an amazing deal – and no wonder everyone is excited about it – especially when the power plants alone could cost 1/5th of that.

They have since upped the cost estimate to $500 billion dollars (you know the way builders estimates can be), but it is still quite a deal.

Thunderfoot estimated the overall build cost of a city like this to be 100 trillion dollars in a video he made last year – which was much more negative than this one – he is not an optimist like me.  [Thunderfoot Clip]

[If you took the entire GDP of Saudi Arabia for about – say the next hundred years, you might just be able to fund this] 

I think Thunderfoot is (of course) forgetting the huge increase in GDP that will come from all of the startups that people will be working at, sales of carbon neutral autonomous flying cars that they clearly show in their video, tourism (where they are projecting that they will attract more tourists than Paris by 2030). There’s the NFT trading, the hologram teachers – with Neom , Saudi Arabia’s GDP can really be expected to grow.  

The British architect Peter Cook, who is working on the project, was asked about its feasibility last year. He said, "You know I think they'll get a bit of it done." He went on to describe the proposed 500-meter height as “a bit stupid” saying “all our engineer friends will tell you this."

I’d like to be clear that I in no way agree with Peter – I think the whole thing is a great idea and believe that the extreme height of the city is as necessary to the project as the fighting robots and the sand that glows like the face of a watch. These are all features of a modern sustainable development that people want.  Neom is without a doubt the future of urban planning.

Saudi Arabia’s economy is today mostly driven by oil and gas, which account for 84 percent of exports and 42 percent of GDP. Saudi Arabians don't generally work in service jobs or do physical labor – they import foreigners to do that type of work.

The country is often described as a neo-patrimonial rentier state as due to the oil wealth; 66 percent of Saudi Arabians work for the government and Saudi men working in the public sector – in contrast to the rest of the world - earn about twice as much as they would earn in the private sector. According to the civil service minister in 2016, many Saudi government employees really only work one hour per day.

Under Mohammed bin Salman's Vision 2030 project, Saudi Arabia is aiming to diversify its economy away from fossil fuels and become a global hub for technology and innovation. Vision 2030 is not just megaprojects like “The Line.” It calls for more women in the workforce, more investment, a focus on tourism and better education to build a knowledge-based economy.

According to Business Insider Saudi Arabia’s mega projects have grown so expensive that it’s oil wealth can no longer cover the cost.  The country has resorted to borrowing and selling shares in the state oil company to fund these projects.

In 2020 Saudi Arabia tripled VAT from 5% to 15% which some Saudis refer to as the NEOM Tax.

Critics of this project accuse the developers of Neom, of greenwashing – or making grand promises about the environment that are not reflected in reality. 

MBS has announced that 50% of Saudi Arabia’s electricity will be produced by renewable energy by 2030, but not a lot of progress has been made on this front. With six years left to go, IEA figures show that only 0.1% of this has been achieved.

Researchers at Skema Business school argue that construction of The Line would generate around 1.8 gigatons of CO2! They say that while smart cities promise zero carbon thanks to new technologies, their construction, operation, and supply requirements are so environmentally costly that it outweighs any carbon reduction that might be attained in the future. According to the researchers, most of the green claims being made by Neom rely on technologies that do not yet exist.

To highlight these contradictions, NEOM has been selected as the host of the 2029 Asian Winter Games which requires the construction of a ski slope… in the desert!

Neom is not Saudi Arabia’s first attempt at building new cities in the desert to diversify their economy away from oil.  In 2005 a $30 billion dollar project was announced to build six cities which were supposed to attract foreign investment, create more than a million jobs and add $150 billion dollars to GDP. Only one of the six cities was ever completed - King Abdullah Economic City, which today has a population of just 10,000 people compared to its target of two million people. Cynics will tell you that the only reason that it was even completed was because it carried the then King's name.

I worry that this podcast has drifted in a somewhat negative direction, but all of that negativity is coming from other people – not me.  I think Neom is a great idea! Thanks for tuning in to this week’s podcast, with a special thanks to our supporters on Patreon who make this podcast possible.  Have a great week and talk to you again soon,  Bye