Saudi Arabia's New Murabba project to lure global investors, but at what cost?

Al-Monitor Pro Members

Dr. Robert Mogielnicki

Senior Resident Scholar, Arab Gulf States Institute in Washington 

March 7, 2023

Ambitious project announcements — such as New Murabba and its “immersive, experiential destination” of The Makaab — are becoming an increasingly common feature of Saudi Arabia’s developmental aspirations. New Murabba’s location on the outskirts of the capital Riyadh raises the political stakes associated with the development, increasing the likelihood that strong state support will be forthcoming. Yet many observers question the feasibility of building the “world’s largest modern downtown” by the 2030 deadline given the large supply of other nascent development projects in the country. There is no doubt, however, that New Murabba will further increase the funding obligations of the Public Investment Fund (PIF), the country’s $620 billion sovereign wealth fund.

• The recently established New Murabba Development Company (NMDC), which is backed by the PIF, will oversee this new downtown development project.
• Crown Prince Mohammed bin Salman is chairman of NMDC.
• Located in the northwest of Riyadh, the project plans to cover an area of 19 square kilometers and accommodate hundreds of thousands of residents. More than 25 million square meters of expected floor area will include around 104,000 residential units, 9,000 hotel rooms, and other retail space.
• The project planners envision a plethora of sustainability-focused, high-tech, cultural and entertainment offerings, which serve as common dimensions of Saudi development initiatives under the leadership of Crown Prince Mohammed bin Salman.
• At the heart of the development project is The Mukaab, a cubic landmark large enough to fit 20 Empire State buildings and hold “incredible state-of-the-art entertainment, dining and retail.”
• The completion date for the project is 2030 — an important year for Mohammed bin Salman’s Saudi Vision 2030 agenda as well as the Saudi bid to host World Expo 2030.
• Neom was announced in October 2017 and is only now moving “from the strategy and planning phase to execution,” according to a Neom CEO letter series from February 2023. New Murabba is, of course, a different project and does not have to contend with the logistical challenges of developing a remote location. Yet the desired timeline for completion nevertheless appears tight.
• New Murabba may emerge as a domestic rival to Neom, potentially pulling away financial and human resources from existing initiatives. Neom has long been considered a top development priority for Crown Prince Mohammed bin Salman and the Saudi government. Analysts and observers refer to Neom as the crown prince’s “pet project,” and its reported $500 billion price tag reinforces its high prioritization.
• The emergence of another high-tech development initiative under the PIF’s institutional umbrella, and which intends to serve as the “new face of Riyadh,” will likely heighten domestic competition for state support and foreign investments.
• To ensure a more balanced development approach across the country, the PIF launched the Saudi Downtown Company in 2022. The company oversees downtown projects in 12 Saudi cities.
• Saudi officials expect New Murabba to add around $48 billion to non-oil gross domestic product and create 334,000 direct and indirect jobs by 2030.
• The announcement of the new project takes place amid a broader strategy to double Riyadh’s population over the decade from 2020-2030. In July 2020, the president of the Royal Commission for the City of Riyadh unveiled a $800 billion plan to improve the livability of the capital and boost economic growth.