Saudi Arabia’s megacity project, NEOM, has cancelled a series of major construction contracts across its developments, signaling a broader shift in priorities under the Vision 2030 program. The latest decisions affect key components of the Trojena mountain resort and critical infrastructure works linked to The Line, raising questions about timelines and execution.
The most significant move involves terminating a contract awarded to Webuild for the construction of three dams, a freshwater lake, and “The Bow,” a striking hotel at Trojena in northwest Saudi Arabia. The contract, valued at around $4.7 billion, was awarded in late 2023. According to Webuild company disclosures, the termination is set to take effect at the end of March 2026, when the project is roughly 30 percent complete. The remaining backlog for the contractor is estimated at €2.8 billion, indicating a substantial portion of the work will now not proceed as originally planned.
NEOM has also ended its agreement with Eversendai Corporation for structural steel works at the Trojena ski village. NEOM terminated the contract, awarded in March 2024 and executed in partnership with Saudi Arabia’s Al Bawani Company, effective from late March 2026. The contractor stated that work had been carried out in line with project requirements up to the termination notice and indicated it would seek compensation for completed work and demobilization costs. The company also suggested that regional geopolitical tensions may have contributed to the decision.
Saudi Arabia confirmed the postponement of the 2029 Asian Winter Games, originally scheduled to take place at Trojena, shortly before the cancellations. The resort had been positioned as a destination featuring artificial skiing and advanced infrastructure, but the removal of key contracts now casts doubt on the pace and scope of its development.
NEOM has also scaled back construction activity on The Line, particularly in relation to tunnel works. South Korea’s Hyundai E&C confirmed that its tunneling contract, part of a joint venture with Greece-based Archirodon and Samsung C&T, was canceled at the end of 2025. The contract covered drill-and-blast excavation for sections of The Line’s underground infrastructure.
These contract terminations are part of a wider strategic review of NEOM and other large-scale developments in Saudi Arabia. The government has been reassessing spending priorities amid rising project costs, execution challenges, and tighter liquidity at the sovereign wealth fund level. As a result, funding is increasingly being redirected towards projects tied to major upcoming events such as Expo 2030 and the 2034 FIFA World Cup, as well as essential sectors including housing, healthcare, and education.
External pressures have also played a role. Ongoing geopolitical tensions in the Middle East have disrupted regional logistics and energy markets, adding further strain to project delivery and financial planning.
While NEOM remains a central pillar of Saudi Arabia’s long-term economic diversification strategy, the recent wave of cancellations highlights a more cautious and phased approach to development. For international contractors, the changes underscore the risks associated with large-scale gigaprojects, where shifting priorities and external factors can significantly change the project.
Image credit: Neom
