Saudi Crown Prince Mohammed bin Salman is once again scaling back his mega-project, Neom, with which he intends to revitalize his kingdom's economy. The latest installment of his backsliding concerns the project for a high-speed railway along the northern coast of the Red Sea which had been entrusted to the Italian giant Webuid, but from which he backed out.
Il change of strategy on the Neom project, of 500 billion dollars, fundamental for the Vision 2030 plan, already considered by many analysts to be at the very least excessive, has assumed a new urgency due to the pressure exerted by the war with Iran sexports of Petroleum, after years of mounting budget deficits in the kingdom.
The withdrawal, effective from May 27, concerns in particular the project "High-Speed Line Connector” for the construction, in the locality of Sharma (Tabuk) in Saudi Arabia. The last month Yasir Al-Rumayyan, governor of the Public Investment Fund of Saudi Arabia, told the Saudi broadcaster Al Arabiya Business that the opulent 160-kilometer-long steel and glass structure, known as The Line, part of the mega-project, it's no longer a priority, while denying that any projects of any kind have been cancelled.
Webuild's experience with Neom concludes
The High Speed Rail project is approximately 20% complete, with a remaining backlog of approximately €1 billion for Webuild. For this project, which has already been suspended, no revenue was expected for the current year. Our accrued costs, such as those related to the early termination of the contract, including the disengagement and dismantling of the construction site, will be refunded by the customer, says a note, holding Webuild harmless from the effects of the termination as provided for by the contract and the law.
With this withdrawal, All of Webuild's activities for Neom have been concluded. Despite this, the company confirmed that it will maintain a order book in construction exceeding 50 billion euros. Webuild had previously said its exposure to the Middle East was limited to approximately 5% of its total order book. This latest cancellation represents 2% of Webuild's backlog and follows the project cancellation Neom/Trojena for the construction of three dams (Webuild residual backlog €2,8 billion) press release at the end of MarchRevenues for the Tabuk high-speed line project were already suspended and it was not included in the 2026 revenue budget.
Webuild shares rose 0,9% to €2,44 in the Milan Stock Exchange late this morning. They have lost 23% over the past six months.
