NEOM tunnel contract termination signals a significant shift in Saudi Arabia’s flagship development, as NEOM cancelled a tunnel construction contract valued at around $1 billion tied to The Line. The project was part of the core infrastructure designed to support transport systems beneath the planned linear city.
Contract ended after client decision
The contract had been awarded to a consortium comprising Samsung C&T, Hyundai Engineering & Construction, and Archirodon. The scope included the construction of a 12.5-kilometre underground tunnel intended to carry highway, metro, and freight networks below The Line.
According to industry reports, the NEOM tunnel contract termination followed a “client’s business restructuring,” indicating the decision was taken by NEOM as part of internal project adjustments. Work on the tunnel had already started before the contract was brought to an end, making the cancellation notable within the project’s early development phase.
Key infrastructure under review
The tunnel formed a critical part of The Line’s design, which relies on layered infrastructure to separate transport systems from pedestrian spaces. The underground corridor was expected to handle high-speed transit and logistics, supporting the broader vision of a car-free urban environment.
The NEOM tunnel contract termination points to a wider reassessment of major engineering packages within the project. Industry sources suggest that several aspects of The Line are being reviewed, particularly those involving complex construction and high capital costs.
Broader project adjustments
The development comes as Saudi Arabia continues to evaluate its giga-project pipeline under Vision 2030. Large-scale projects such as NEOM have faced rising costs, logistical challenges, and evolving timelines, prompting authorities to revisit execution strategies.
While NEOM remains a key pillar of the kingdom’s long-term economic diversification plans, the latest contract cancellation highlights a more measured approach to delivery. Project scope, timelines, and spending are being aligned more closely with practical considerations.
The Line is still progressing in phases, but decisions such as this underline the ongoing recalibration within one of the world’s most ambitious urban projects.
