The Procurement Deals Driving Saudi's $1.5tn Neom Project

Saudi Arabia's US$1.5tn Neom development represents one of the most ambitious construction visions in modern history. While the overall vision remains intact, Saudi Arabia's leaders are significantly downscaling the project's construction timeline due to rising costs and repeated delays, according to reports.

The flagship development, with initial phases targeted for 2030, includes plans for a city named The Line, consisting of a vast stretch of 500 m skyscrapers in the desert. For procurement professionals, Neom offers valuable insights into managing supply chains for projects of unprecedented scale and complexity.

HRH Crown Prince Mohammed bin Salman's Vision 2030, a strategic framework designed to end the Saudi Arabian economy's dependence on oil, gave birth to Neom. Funded primarily by the Public Investment Fund (PIF), Neom is the "crown jewel" of the Kingdom's giga-projects.

However, with oil prices fluctuating and the Kingdom seeking to manage a widening budget deficit, the "100-mile linear city" dream of The Line has been re-evaluated, according to industry reports. There is now more focus on high-value segments that offer immediate economic returns, such as luxury tourism and digital infrastructure.

Strategic contractor procurement at scale

The scale of Neom has demanded the involvement of global engineering and construction companies. The project represents the world's largest customer for civil engineering services, with key international and domestic businesses securing multi-billion-dollar contracts to deliver the foundational infrastructure.

Italian contractor WeBuild is spearheading the US$5bn dam project at Trojena, constructing three dams to create an artificial lake supporting the mountainside ski resort. European firms Vinci SA and ACS, alongside regional heavyweights Nesma & Partners and Al Bawani, are heavily involved in the backbone infrastructure – the high-speed rail links and underground utility tunnels designed to sit beneath The Line.

China State Construction Engineering Corp (CSCEC) is instrumental in the rapid vertical construction of residential and administrative clusters, using modular construction techniques to meet aggressive deadlines.

For procurement executives evaluating large-scale infrastructure projects, the contractor selection process at Neom demonstrates the importance of balancing international expertise with regional partnerships. The diversity of contractors reflects a strategic approach to risk management and knowledge transfer across the development.

The US$10bn supply chain partnership

One of the most significant developments in Neom's operational history is the US$10bn logistics joint venture with DSV. Established in October 2023 and set to be fully operational in 2025, the partnership (51% NEOM, 49% DSV) is responsible for the end-to-end supply chain management of the entire region.

The sheer volume of materials – from sustainable timber to high-grade steel and sensitive AI hardware – requires a dedicated ecosystem. The joint venture is currently developing an innovation centre at Oxagon to pioneer autonomous freight and carbon-neutral last-mile delivery.

For global suppliers, the Neom Supplier Portal has become a critical gateway, with the project seeking partners who can adhere to circular economy principles and the highest ESG standards. This approach represents a shift in procurement strategy for mega-projects, where sustainability credentials and technological capabilities are weighted alongside traditional cost and delivery metrics.

The partnership structure allows DSV to leverage its global logistics network whilst Neom maintains strategic control over supply chain priorities, creating a model that other mega-projects are now studying closely.

Procurement considerations across development zones

The development of Neom is happening at varying speeds across its four main regions. The most significant shift is towards AI, with the PIF unveiling HUMAIN, a venture focused on transforming sections of Neom into a global hub for data centres and AI research.

The Line, while originally planned to house 9 million people across 170 km, currently focuses on the first 2.4 km "starter" segment. Sindalah, the luxury island destination, is the most mature, having opened in December 2024 to the global yachting community.

Trojena construction remains intensive as the site prepares for the 2029 Asian Winter Games. Oxagon, the octagonal industrial port, is becoming a hub for green hydrogen production and automated manufacturing, set to be the world's first fully automated port and integrated supply chain.

The Oxagon Port is the site of the NEOM Green Hydrogen Company (NGHC), which aims to be the world's largest utility-scale green hydrogen plant. For procurement professionals, Neom demonstrates how strategic supply chain partnerships, rigorous supplier standards and phased development approaches can help manage the complexities of delivering transformational infrastructure programmes at unprecedented scale.