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Gulf’s megaprojects face delays, reassessment

Saudi Arabia has cut capital expenditure for a number of Vision 2030 projects amid a drop in oil prices and Chinese investment. Will other Gulf states follow suit?

Weakened by the recent steep oil price decline, Saudi Arabia declared it must “extremely reduce” budget expenditures and thus slashed operational and capital spending by $26.6 billion, according to a May 11 statement by Finance Minister Mohammed al-Jadaan. 

Crown Prince Mohammed bin Salman’s programs and reforms to pivot the economy away from hydrocarbon revenues will suffer significant cuts. NEOM, a proposed $500 billion futuristic city on the Red Sea coast, might see project implementation “stretched out over a longer period,” said Ali Shihabi, a member of the NEOM advisory board. 

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