RIYADH • Saudi Crown Prince Mohammed bin Salman has announced plans to build a new city on the Red Sea coast, promising a lifestyle not available in today's Saudi Arabia as he seeks to remake the kingdom in a time of dwindling resources.
He said the city project, to be called "Neom", will operate independently from the "existing governmental framework" with investors consulted at every step during development.
The project will be backed by over US$500 billion (S$680 billion) from the Saudi government, its sovereign wealth fund and local and international investors, according to a statement released on Tuesday at an international business conference in Riyadh.
The Prince, 32, made a rare public appearance at the conference to promote the project, telling the bankers and economic policymakers in attendance that the kingdom was moving to a "new generation of cities".
Neom will be powered by clean energy, he said, and will have no room "for anything traditional".
Holding two phones - one a decade old and the other, a smartphone - the Prince said they represented the difference between what Neom would be and any other such area.
The 26,500 sq km zone - stretching into Jordan and Egypt - will focus on industries, including energy and water, biotechnology, food, advanced manufacturing and entertainment, he added.
The ambitious plan includes a bridge spanning the Red Sea, connecting the proposed city to Egypt and the rest of Africa.
Prince Mohammed's announcement was the highlight at the opening of a three-day international business conference drawing over 3,500 people from 88 countries. It was arranged by Saudi Arabia's main sovereign wealth fund, the Public Investment Fund (PIF), as part of an effort to present the kingdom as a leading global investment destination.
"Neom is situated on one of the world's most prominent economic arteries... Its strategic location will also facilitate the zone's rapid emergence as a global hub that connects Asia, Europe and Africa," PIF said.
It said yesterday the Neom mega economic zone was envisaged as the crown jewel in a string of planned investments that should nearly double the assets of the kingdom's sovereign wealth fund to US$400 billion by 2020.
There was no immediate comment on the Neom plan from Jordan and Egypt, which are close allies of Saudi Arabia.
Mr Klaus Kleinfeld, the former chairman and chief executive officer of Siemens and Alcoa, was appointed to lead the development of Neom.
SoftBank Group's Vision Fund on Tuesday signed an initial agreement with the kingdom's wealth fund to buy a "significant" stake in state-controlled Saudi Electricity Company, and will provide energy for the new city.
Saudi Arabia this year agreed to become a cornerstone investor in the Vision Fund.
The project "seems to be broadly modelled on the 'free zone' concept pioneered in Dubai, where such zones are not only exempt from tariffs but also have their own regulations and laws, hence operating separately from the rest of government," said Associate Professor Steffen Hertog of the London School of Economics, a long-time Saudi watcher.
"In Dubai, this has worked well, but attempts to copy it have done less well in the region."
A promotional video released on Tuesday features a lifestyle so far unavailable in Saudi cities. It showed women free to jog in leotards in public spaces, working alongside men and playing instruments in a musical ensemble. The one woman wearing a hijab had her head covered with a patterned pink scarf.
The kingdom has already announced a plan to transform hundreds of kilometres of Red Sea coast into a semi-autonomous world-class tourism destination, governed by laws "on a par with international standards".
REUTERS, AGENCE FRANCE PRESSE, BLOOMBERG
