New Saudi mega-city will be listed publicly, says crown prince

The $500 billion mega-city NEOM planned by Saudi Arabia will be floated on financial markets alongside oil giant Saudi Aramco as part of the kingdom’s drive to diversify away from oil, the crown prince said on Wednesday. 

Crown Prince Mohammed bin Salman's surprise announcement about the listing of NEOM, a 26,500-square km zone that will extend into Jordan and Egypt, is the latest and most extraordinary in a slate of privatisation programmes led by the floating of Aramco.

The futuristic high tech hub looks set to become a flagship of reforms championed by Prince Mohammed to create jobs, encourage entrepreneurs and permit new freedoms among Saudis steeped in religious puritanism and dependence on the state.

"The first capitalist city in the world ... this is the unique thing that will be revolutionary," said Prince Mohammed, heir to the throne of the largest Arab economy, an absolute monarchy.

Link to Egypt

"Without a doubt, at the end of the day NEOM will be floated in the markets. The first zone floated in the public markets. It’s as if you float the city of New York."

The 32-year-old spoke on the sidelines of the Future Investment Initiative conference, which has attracted nearly 4,000 delegates from around the world to Riyadh this week.

Adjacent to the Red Sea and the Gulf of Aqaba and near maritime trade routes that use the Suez Canal, the zone will serve as a gateway to the proposed King Salman Bridge, which will link Egypt and Saudi Arabia.

No Sharia law in the mega-city

NEOM will be fully owned by Saudi Arabia’s sovereign Public Investment Fund (PIF) until its listing, and will attract investments from companies in renewable energy, biotechnology, advanced manufacturing and entertainment, the PIF has said.

"It won’t be listed in the markets until the idea is mature enough,” Prince Mohammed said. "It might be after 2030, it might be before, but the idea and the strategy is to float it eventually."

The new city will not follow the rules and regulations of Sharia law enforced in the rest of Saudi Arabia.

Liberal lifestyle 

It will offer residents a more liberal lifestyle, allowing musical concerts and entertainment in a remote corner of the desert kingdom. 

Saudi Arabia has already started to relax some long-standing rules, including what was an effective ban on women driving.

Prince Mohammed said the city could appoint a board of directors and government (chief executive) whose only responsibility will be to stimulate economic activity.

"In New York, the governor is appointed to meet certain needs, including growth, but in NEOM the governor (CEO) doesn’t have to deal with any of those problems. He only has growth in mind."

He said the name mixed "neo", meaning new, with M, the first letter of the Arabic word for future.