(Bloomberg) — Saudi Arabia has awarded to two Saudi firms contracts to build worker housing for its futuristic mega-city called Neom, as plans for the $500 billion project move forward despite skepticism from investors.
Tamimi Group and Saudi Arabian Trading & Construction Co. won contracts to finance, build and operate three residential areas with the capacity to house 30,000 people, Neom said in a statement on Sunday.
The areas will be part of a so-called “Construction Village,” which Neom later plans to expand to accommodate more than 100,000 residents, it said. Neom did not say how much the contracts were worth.
Along with plans to sell shares in state oil company Saudi Aramco, mega-city Neom is a centerpiece of Crown Prince Mohammed bin Salman’s “Vision 2030” plan to end the kingdom’s dependence on crude and diversify the economy.
The kingdom’s sovereign wealth fund is spearheading the development of the project on the Red Sea coast, and work has begun on the first phase, called Neom Bay.
However since the project was announced in 2017, international investors have been slow to commit, citing concerns about economic viability and political risk.
“The awarding of these contracts is another milestone in our journey to turn the Neom dream into a reality,” Neom chief executive Nadhmi Al-Nasr said in the statement. “Building a giga-project the size of Neom is a great challenge that requires manpower to settle there for years to come.”