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The Almighty Buck

Saudi Arabia Plans IPO of $500 Billion For Its Megacity 'Neom' (arabianbusiness.com) 163

Saudi Arabia's Crown Prince Mohammed bin Salman said they are planning an initial public offering of the Kingdom's $500 billion megaproject Neom as soon as 2024. Arabian Business reports: Talking to reporters in Jeddah, the crown prince said the Kingdom is setting aside $80 billion for Neom Investment Fund, where it would invest in companies that agree to operate in the futuristic city, Bloomberg has reported. The announcement was witnessed by global investors including Bridgewater Associates founder Ray Dalio, Tim Collins of Ripplewood, Saudi Prince Alwaleed bin Talal and Kuwaiti retail billionaire Mohammed Alshaya.

The Saudi crown prince also unveiled funding details of Neom. First phase, which runs until 2030, will cost 1.2 trillion riyals, with about half of that covered by the Public Investment Fund. Officials will then seek to raise another 600 billion riyals from other sovereign wealth funds in the region, private investors in Saudi Arabia and abroad, and the planned IPO on Tadawul. The IPO, which could happen by 2024, will add more than 1 trillion riyals to the Kingdom's stock market, the crown prince noted.
In addition to the news about the IPO, a teaser video was released, revealing the design for The Line: a "vertical city" some 500 meters tall, 170 kilometers in length, and covered in mirrors.

"Although it looks like a wall, The Line is actually supposed to be comprised of two huge parallel buildings, connected via walkways and divided into neighborhoods that are supposed to offer all the amenities of city life within a five-minute walking distance," reports The Verge.

"Vegetables will be 'autonomously harvested and bundled' from community farms; 'a high-speed train will run under the mirrored buildings'; the Line will include a stadium 'up to 1,000 feet above the ground,' and there'll be a marina for yachts under an arch between the buildings." A report from the Wall Street Journal in 2019 also noted robots will outnumber humans and hologram teachers will education genetically-enhanced students.
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Saudi Arabia Plans IPO of $500 Billion For Its Megacity 'Neom'

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  • by rsilvergun ( 571051 ) on Tuesday July 26, 2022 @09:06PM (#62737020)
    What invest in a city in a desert during a drought that's likely to continue and to get worse? I get that Saudi Arabia has to do something since it's only a matter of time before solar and wind take over but I don't think this is it.
    • by 140Mandak262Jamuna ( 970587 ) on Tuesday July 26, 2022 @09:13PM (#62737032) Journal
      All the oil wealth of Saudi Arabia belongs to the family of King Saud, his tribal confederates, etc. Some 5000 sheiks own it all. Rest of the population owns nothing, but they are appeased by incredible levels of government subsidies and a pecking order hierarchy.

      As long as the West needed the oil they were helping the ruling family whatever it wants to maintain stability of oil supply. The moment West does not need its oil, they will let that country stew in own juices, sort of what we do to places like Sierra Leon or South Chad. But unlike these impoverished countries Saudi Arabia has raked up a steady stream of enemies, both in the West and also in the Indian sub continent. So they will also chip to make their misery worse once oil loses its importance.

      • by Luckyo ( 1726890 )

        Problem being that "West" doesn't really need their oil any more. North America as a unit is net exporter already, and most of Europe could do on Norwegian, British and Russian supplies if they really wanted to cut Saudis off completely. This was in fact mostly done already in late 2010s. At that point the main destination for Saudi oil has been PRC and other East Asian powerhouses such as Japan and South Korea because of aforementioned facts.

        • Sure thing Luckyo (Score:2, Insightful)

          by Anonymous Coward

          Problem being that "West" doesn't really need their oil any more.

          And yet every time there's a global hiccup. America goes cap in hand to the Saudis and asks them to pump more oil.

          Maybe you didn't notice but oil is a globally traded commodity. How much Saudi Arabia pumps has a big affect on the price of oil. Whether you're buying Saudi oil or not.

        • by mobby_6kl ( 668092 ) on Wednesday July 27, 2022 @04:41AM (#62737608)

          Problem being that "West" doesn't really need their oil any more. North America as a unit is net exporter already, and most of Europe could do on Norwegian, British and Russian supplies if they really wanted to cut Saudis off completely.

          Uhhh have you been living under a rock for the past 6 months?

          • by mjwx ( 966435 )

            Problem being that "West" doesn't really need their oil any more. North America as a unit is net exporter already, and most of Europe could do on Norwegian, British and Russian supplies if they really wanted to cut Saudis off completely.

            Uhhh have you been living under a rock for the past 6 months?

            Almost 70% of Saudi oil exports goes to Asia with Japan and China taking the top importers (21 and 17% respectively) Third is the US with 15%. The first European nation on that list is France, with 2.2% of the exports.

            Europe has already pretty much cut the Saudis out of oil imports, the problem is that France and the UK are selling weapons to Saudi Arabia (as are the US) and want to keep doing so.

          • by Luckyo ( 1726890 )

            Have you been born six months ago? Or does decade before last six months magically not matter for a long term strategic issue?

        • We are getting there, but not yet.

          All oil are not equal. Saudi oil is very cheap to extract (avoiding the term produce) and is more suitable for gasoline making. American oil is still profitable but suitable for other uses. If oil exporters disturb the supply, they can make more money in the short term.

          Soviet union collapsed because Saudi Arabia crashed the price of oil in the 1980s. Lacking the oil revenue USSR collapsed. Putin remembers that and that maniac is out for revenge. But as far as oil is con

          • Russia can afford to undercut Saudi, sell it below its extraction + appeasement cost.

            You may want to check the price of appeasement in Russia too.
            Even with the higher price and higher oil income. The amount of extra money Russia has to spend to keep the economy afloat, means they are running at a loss. Their currency reserves are falling despite increased oil income.

          • by Luckyo ( 1726890 )

            This doesn't reflect reality of extraction costs at all. Russian old "easy" fields are running dry and many of them are dry already. Their new fields are much more difficult, and effectively only came online because of international majors coming in. If memory serves me, they only came back to their USSR levels of oil production in 2018 or 2019.

            International majors were among the first companies to pull out. When Halliburton, Shumberger and Baker&Hughes pull out on moral ground, you know there's an actu

        • by Potor ( 658520 )
          I'd like to buy your oil newsletter. You seem quite informed.
          • by Luckyo ( 1726890 )

            If you actually want more information on some specific part of my statement, and that isn't "five minutes on google to find out" kind of information, I can probably help.

    • They have enough money to build desalination plants.

      • by ShanghaiBill ( 739463 ) on Tuesday July 26, 2022 @09:41PM (#62737070)

        They have enough money to build desalination plants.

        Saudi Arabia has enough water for everything except agriculture.

        Desalination for agriculture is economic insanity. It is twenty times cheaper for them to buy wheat than to grow it with desalinated water.

        • you might find this interesting as it contradicts your statement,

          https://seawatergreenhouse.com... [seawatergreenhouse.com]

          • by 140Mandak262Jamuna ( 970587 ) on Wednesday July 27, 2022 @05:50AM (#62737692) Journal
            Reverse osmosis? Sea water brine? Its insane. My home in Chennai India has this system. Our well water is brackish, potable but tastes bad. RO for that water needs the membranes replaced every three months. It extracts 25% of input as very good potable water. 75% rejection in mildly brackish will rise to nearly 95% for sea water. Sea water is so corrosive it will corrode all infrastructure, gum up all membranes with salt it wont make economic sense. If someone pitches this nice graphics to you and come hat in hand for venture capital, run don't walk.
          • That is interesting, but there is no information in the link about cost.

            The projects listed are small greenhouses growing produce for local consumption. Each project is less than a hectare.

            Saudi Arabia needs millions of hectares of wheat to feed itself.

            Perishable produce is expensive to transport. Wheat is cheap to transport.

        • Saudi Arabia has enough water for everything except agriculture.

          Desalination for agriculture is economic insanity. It is twenty times cheaper for them to buy wheat than to grow it with desalinated water.

          Only if Saudi Arabia is comfortable relying on external sources for their food supply -sources which can be cut off/reduced or change prices at any time.

          That doesn't seem like a good strategic plan.

          • Only if Saudi Arabia is comfortable relying on external sources for their food supply

            If they are worried about a supply disruption, stockpiling extra food in warehouses and silos is more cost-effective than building de-sal plants.

    • by Powercntrl ( 458442 ) on Tuesday July 26, 2022 @09:27PM (#62737050) Homepage

      What invest in a city in a desert during a drought that's likely to continue and to get worse?

      For the same reason people invest in any other dumb idea: because someone who was already rich pitched it to them.

      Recently on Facebook I've been seeing this ad campaign for a cooler (as in, the things you fill with ice and beer and bring to the beach) with a water pump, heat exchanger, and a fan with a hose attached to it. A quick cursory examination of the math [wikipedia.org] will tell you you're not going to get much cooling out of this thing before your ice melts (and worse, your beer gets warm). Despite the laws of thermodynamics giving this thing the middle finger, investors obviously dumped enough money into it that the company can afford to run plenty of annoying ads.

      Earlier in today's Slashdot stories, there's that article [slashdot.org] about $21 million invested in literally nothing.

      Really goes to show that you don't have to be all that smart to be rich, you just have to be rich.

    • Yeah... at a what would appear to be a construction cost of ~$280 per square meter floor area. Good luck with that, it sounds more like a $10 Trillion project, or about 1/20 the size proposed.

      • Yeah... at a what would appear to be a construction cost of ~$280 per square meter floor area. Good luck with that, it sounds more like a $10 Trillion project, or about 1/20 the size proposed.

        What part of First phase confused you?

        The Saudi crown prince also unveiled funding details of Neom. First phase, which runs until 2030, will cost 1.2 trillion riyals, with about half of that covered by the Public Investment Fund.

        Total price was never mentioned. Nor the number of phases they are planning.

    • I don't know, but Saudi Arabia is a net exporter of food crops, so I think they have their water management relatively well managed.

      It could be that all non-arid areas are dedicated to agriculture and so it makes sense that developments for people would then be in the desert.

      I'm also guessing this is part of the design with two parallel sets of highrises. In between, I'm guessing they'll have trees and shit, and this - along with shade - will help create an efficient micro-climate for living.

  • That thing looks dystopian and isolated..

    • Re:Dystopia (Score:5, Insightful)

      by locater16 ( 2326718 ) on Tuesday July 26, 2022 @09:18PM (#62737042)
      Ok one: it looks cool as hell cyberpunk overbuilt dystopia. Like I've always wanted to see a real life version of Coruscant for it's own sake. Mind that's not "live in" or "start a business in" or "invest in" or anything. But just like walled city of Kowloon I am 100% on board for this as something to marvel at.
    • by fermion ( 181285 )
      It is easy to think this is satire

      But very practical things like waste management for 9 million people come to mind. It is not a linear problem. A few people on land use chamber pots. A family on a farm can have self contained septic system. 9 million people living in a cage need a fool proof septic system.

      One imagines it will quickly evolve a class system, where servants are literally on the ground while the upper crust is established more at the upper levels.

      And they must assume they are going to de

      • If it is in Saudi Arabia then it will be pretty much run by slaves, because Saudis don't work.
        • by zlives ( 2009072 )

          ah you translated autonomous correctly.

  • by Eunomion ( 8640039 ) on Tuesday July 26, 2022 @09:18PM (#62737040)
    Saudi Arabia is a tragic byproduct of the oil century. Hopefully it will fade away as oil does, and either evolve into something more honorable or fall to a level commensurate with its brutality.
    • great, more immigrants to deal with
      • There's always Dubai they could go to. At least UAE found a gimmick other than oil and religion, however crass and "Orlando of the East" it is.
    • So... what legal & human rights would the inhabitants of this great city have? Would there be different levels of "citizenship" based on which vagina you came out of & in what order?
  • Releasing this as a cryptoasset and somehow tying Elon Musk into it will really attract the sort of people that like throwing money into moonshot blackholes.

  • stay away from the embassy in this city. I hear it will feature the latest solar powered robot assassins.
  • In other news, the sun rose this morning.

  • by Ferocitus ( 4353621 ) on Tuesday July 26, 2022 @11:33PM (#62737200)

    heads will roll.

  • by SethJohnson ( 112166 ) on Wednesday July 27, 2022 @12:10AM (#62737240) Homepage Journal
    Architecture goes vertical when the horizontal costs a premium or is extremely limited. Building vertical costs much more than horizontal. Even building down beneath surface would be cheaper than building this tall and narrow.

    Looking at the concept renderings, the surrounding desert terrain is limitless. Living expenses for the vertically-stacked residents will be much higher than if they chose to live elsewhere horizontally spread out. Keep in mind, this is an IPO for investing in the construction-- those investors are expecting to see a return and that comes from charging premium rent.

    Soccer stadium 1,000 feet off the ground? Something tells me $500,000 billion isn't nearly enough to build this thing.
    • The vertical aspect isn't necessarily true; sure, you pay more for structure but you gain a few things back in terms of transportation efficiency, opportunities for closed-loop processes, etc. Sure, a slab on grade is a cheaper building, but once the building hits a certain size then logistics become a controlling factor. You also have less window line, which matters for some things.

      As for the stadium... well, I'd call that an artist's rendering and not reality.

      Is it a good investment? With this kind of

      • you gain a few things back in terms of transportation efficiency, opportunities for closed-loop processes, etc.

        I agree with you 1000% on the efficiencies offered. The challenge I'm laying out here is that the investors are not counting those efficiencies towards their return and the residents who will have to pay substantially higher rent may not see the cost/benefit ratio attractive enough to justify. Those efficiencies are what motivates a city to implement zoning and planning-- they see a bene

        • The benefit of traditional cities and zoning is that it responds to the time domain. This is the opposite: build it and they will come. MBS wants to build a 9-million person city in one shot. Ultimately this would not be the first time it has been done in the Middle East... just at a faster pace.

      • Also we shouldn't compare horizontal vs vertical costs in cities that are designed to be horizontal because, well, that skews the data. I haven't looked at the renderings for this city.

        If a city is *planned* to be vertical there are things you can do that wont happen in a planned-horizontal city. As an example you could require that buildings have elevated walkways between them high enough that you don't impede the passing of traffic at ground level. Public transit could also be put at a similar elevat

    • To further your point, where will the working-class cleaners and such live? That's a common problem with gentrification and the Saudi Arabian population is about 30% foreign guest-workers [wikipedia.org].

      True fact, women are so discriminated against there, the new Mecca-Medina railroad received 28,000 applications from Saudi women hoping for 1 of 30 open jobs [bbc.com].
  • "hologram teachers will education genetically-enhanced students."

    Well, if one of their subjects is English, I just hope they do a better job at it than whomever taught the language to the submitter.

  • This wall like city, The Line, may never happen. It does however look more interesting of a concept than Trump's wall, which was pretty boring and for the most part ineffective at what it was trying to achieve.
  • So women will still be suppressed in the future city of Neom run by Islams ! Built with covered in mirrors, bad idea - will kill anything flying near it !
  • ...eh, a very long, bright, thin blade cutting across the country.
    Watch the concept video and you'll see what I mean.

    Normally we build phallic symbols but this one has a "surgical" theme.

  • A long, skinny arcology. Interesting, but I suspect their reach exceeds their grasp.

    I hope they remember to distort the mirrored sides. I wouldn't want to be blinding every ship passing through the Gulf.

  • doesn't seem very smart. Building high is primarily a solution to a shortage of land which is not the case in the desert. And in the video they talk about care for the environment which is brazen coming from a country that made its wealth by destroying the planet. But anyway have fun living in a fuming hot desert that only got more hot and dry by your own making.
  • by jbmartin6 ( 1232050 ) on Wednesday July 27, 2022 @07:24AM (#62737832)
    A better name for the city might be Ozymandiopolis
  • I hear there's a sucker born every day. MBS has a nice sense of humor. Maybe a bit dark.

  • I reckon the only reason this idea even progressed is because a certain tyrant with a penchant for murdering critics was so enamored with the idea that nobody would say no. Because on paper, and in reality it's going to prove to be a really dumb, expensive white elephant - sink billions into building 110 miles in a straight line when it would obviously make more sense to build just a normal size city on less land where things like infrastructure, transport and resources can be better shared.
  • I wonder who will be the investors in this scheme. Warren Buffet? Norwegian Sovereign Fund? Rich Saudis gently encouraged? Difficult to say...

  • Error, when MBS needn’t- desert on both sides = easy access, easy diggin’s.

    An omission such as this flaws the foundational premise unless the buildings are an illusion for impenetrable breach walls sans motes. Or desert==mote.

    Desert dystopian, detrimental reliant public space, privately owned and built as a profit-stake monument for 1% population on planet.

    Love to see worker, concubine housing accommodations.

  • Buildings from the future, laws from the dark ages
  • Who wants to invest in a place that will feature temperatures incompatible with human life? Fortunately they plan to have many robots, perhaps they will enjoy the climate.

Keep up the good work! But please don't ask me to help.

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