Neom, according to reports, is turning into a financial catastrophe. McKinsey and Co. are the only ones who seem to be doing well.
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. The Journal notes that this is more than 25 times Saudi Arabia’s annual budget. Among the harsh realities threatening to derail the project are insufficient labor, inadequate roads, and a lack of electricity.
There are some winners, however. McKinsey and Company, the consulting giant, is reported to earn more than $130,000,000 annually for their services. This is despite controversy surrounding its role. The firm was involved in the planning of the project as well as the validation of its financial projections. A McKinsey spokesman tells the WSJ the firm has “strict protocols to prevent conflicts of interest in our engagements.”
