Saudi Arabia stops work on NEOM’s The Line, shifts focus to Red Sea infrastructure amid Iran War

Saudi Arabia will further delay work on The Line, the planned futuristic megacity that was a central part of the broader NEOM project on the Red Sea coast, shifting focus toward infrastructure instead, the news outlet Semafor reported this week.

The radically ambitious project to construct a several-kilometer-long, glass-and-concrete zero-carbon linear city has experienced several setbacks over the past years amid cost overruns.

Now, the kingdom reportedly has decided to shift its focus to projects expected to deliver tangible results more quickly, such as port infrastructure and AI data centers.

People familiar with the matter told Semafor that NEOM, the company heading the project on behalf of the kingdom’s Public Investment Fund, chaired by Crown Prince Mohammed bin Salman, will postpone several other components of the larger plan, including tourism destinations like the mountain resort that was due to host the 2029 Asian Winter Games.

Fully operational on the Red Sea, #PortofNEOM is actively receiving and moving complex cargo through its multi‑purpose terminal.

Our infrastructure and operating standards support dependable cargo handling and multimodal routing spanning trade flows from Americas, Europe and… pic.twitter.com/rZ1sGYFWRI

— NEOM (@NEOM) April 19, 2026

Instead, work will concentrate on developing nearby OXAGON, an industrial city with a seaport that is part of plans to develop trade routes and infrastructure in the western part of the Arabian Peninsula.

This has received new urgency because of the Iran War and the resulting closure of the Hormuz Strait and the kingdom’s main port, Ras Tanura, which has also been hit by Iranian strikes several times during the war.

“As trade routes shift and regional dynamics evolve, (the) Port of NEOM is emerging as a key gateway,” NEOM stated on 𝕏 last week. “Strategically positioned on the Red Sea and fully operational, the port is already enabling faster, more connected trade.”

The port received about 2 per cent of Saudi imports last year.

A faster route in motion.

Through multimodal connectivity, #PortofNEOM is linking Europe, Egypt, Saudi Arabia, Iraq, and the wider GCC, streamlining how goods move by land and sea.

#NEOM pic.twitter.com/QAn361QzOE

— NEOM (@NEOM) April 20, 2026

Until now, the main alternative port in western Saudi Arabia was Yanbu, which is connected to the oil fields in the east via an over 1,000 kilometers (about 621 miles) long pipeline. Its oil exports have quadrupled since February to over 29 million barrels per week in April, according to the Financial Times.

NEOM plans to invest another USD$3 billion into OXAGON, according to Semafor, including in the construction of utilities and data connectivity to facilitate the future construction of AI data centers.

However, the plan to connect the country’s two coasts to provide alternative export outlets faces additional challenges, as a $27 billion plan to build a 1,500 kilometer (932 mile) train line connecting the capital Riyadh to Jeddah, the largest port by capacity and which handled around a quarter of imports in 2024, is also delayed and projected to be completed only by 2034.

The Neom project had been a central part of Mohammed Bin Salman’s “Vision 2030,” which has seen several setbacks in recent years, largely caused by falling oil prices that strongly limited the capital available for multiple mega projects at the same time.

Built for today’s demand, and tomorrow’s scale.#PortofNEOM combines deep-water access, advanced handling capabilities, and integrated storage solutions to support complex, high-volume cargo with efficiency and precision.#NEOM pic.twitter.com/Z9to56O8oV

— NEOM (@NEOM) April 21, 2026

The Line was once envisaged to house 1.5 million residents by the end of the decade, though the projection is now down to only around 100,000 people.

The Public Investment Fund also announced a funding stop for several other prestige projects, including LIV Golf, intended as a rival to the established PGA Tour, and $50 billion plans for “Mukaab,” a giant cube in Riyadh.

This article originally appeared on ALL ARAB NEWS and is reposted with permission.