New Saudi mega-city to be listed publicly

RIYADH / Reuters

The $500 billion mega-city 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 told Reuters in
an interview.
Crown Prince Mohammed bin Salman also said Aramco’s initial public offering is on track
for next year and the national oil giant could be valued at more than $2 trillion.
His surprise announcement about the listing of NEOM, a 26,500-square km (10,230-square mile) 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 to create jobs and encourage entrepreneurs.
“The first capitalist city in the world … this is the unique thing that will be revolutionary,” said Crown Prince Mohammed. “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.”
He 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. Switching between English and Arabic, sometimes in the same sentence, the prince seemed most excited discussing his plans for the new city.

FOCUS ON GROWTH
Adjacent to the Red Sea and the Gulf of Aqaba and near maritime trade routes that use the Suez Canal, NEOM will serve as a gateway to the proposed King Salman Bridge, which will link Egypt and Saudi Arabia.
The zone 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 said.
“It won’t be listed in the markets until the idea is mature enough,” Crown Prince Mohammed said. “It might be after 2030, it might be before, but the idea and the strategy is to float it eventually.” 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.
Crown Prince Mohammed said the city could appoint a board of directors and governor (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, he added. The new city is part of the crown prince’s ambitious Vision 2030 plan to overhaul the economy of Saudi Arabia, OPEC’s largest producer, and provide jobs for an overwhelmingly young population in the face of a global oil price decline since 2014.