Neom Cancels More Contracts
The Pulse
Neom Cancels More Contracts
Saudi Arabia's Neom megaproject has been quietly unravelling through early 2026, with billions of dollars in contracts cancelled across its biggest projects.
The Line is basically on hold; it may never come to life
Neom’s headline mega project was in deep waters before 2026. In March 2026, the contract cancellations became public. South Korea's Hyundai E&C, working in a joint venture with Greece's Archirodon and Samsung C&T, had its $1 billion tunnelling contract terminated. That contract covered the underground transport infrastructure that was supposed to run the length of The Line. It's gone.
Trojena is also in trouble
Trojena was Neom's ultra-luxury mountain ski resort. It was made up of a massive artificial lake, ~30km+ ski slopes, luxury hotels and mansion - the works. Saudi Arabia had committed to hosting the 2029 Asian Winter Games there. In January 2026, they quietly pulled out of that commitment.
The contract cancellations followed. Despite the cancellations, construction at Trojena had actually progressed significantly with work on the ski village and dam infrastructure well underway. Steel contractor Eversendai had its structural steel contract for the ski village terminated. Then Italian firm Webuild lost its $5 billion contract to build three dams and the artificial lake, with the work only about 30% done. Billions more, gone.
Will Neom owe the contractors?
The cancellations aren't arbitrary in a legal sense. Neom appears to have used ‘termination for convenience’ clauses - a standard caveat in large construction contracts - which allow a client to cancel at any time without proving fault. The catch is that contractors must be compensated.
That typically means payment for all work completed to date, costs already incurred such as materials, equipment, mobilised staff, and demobilisation costs. In many contracts, lost profit on the work that wasn't completed could also be a part of the terms and conditions. In Webuild's case alone - a $5 billion contract terminated at 30% completion - the settlement could run into the billions just for work already done.
Contractors could push for more if they can prove that Neom mismanaged the projects before pulling the plug, or that the termination wasn't genuinely for convenience but was disguising a deeper problem on Neom's side. That’s unlikely to happen.
In reality, companies like Hyundai, Webuild, and Eversendai are large enough to negotiate hard but also have long-term interests in the Gulf region so a quiet, confidential settlements rather than public litigation would make more sense.
The bottom line: walking away from these contracts isn't free. Neom will likely pay out significant sums in settlements. The calculation is perhaps that it's still cheaper than finishing projects that ballooned far beyond their original budgets.
A true oasis with immense potential
Neom's setting is genuinely remarkable - red desert, calm Red Sea waters, dramatic mountains, clear night skies, good weather, and a stone's throw from the Suez Canal. That geography doesn't disappear because The Line goes away. The foundations for something significant are still there. It just looks different from what was conceived; less sci-fi city, more industrial port, green energy hub, and AI infrastructure.
