Saudi Arabia’s Neom giga-project has terminated the contract to construct the NEOM Industrial City Connector. This was a high-speed rail line linking Oxagon, its port and floating industrial zone, with The Line, the zero-carbon linear city planned to stretch 170km across the kingdom’s northwest.
A €1.4 billion ($1.6 billion) contract was awarded to Italy’s Webuild in May 2023. Webuild was supposed to design the project. Also, it was supposed to build the 57km stretch of high-speed railway.
Webuild Confirms the Contract Termination
The company tasked with the project, Webuild, confirmed the termination in a statement on Friday. However, Neom did not immediately respond to an AGBI request for comment.
Moreover, Neom has exercised its right to cancel the deal for the high-speed line connector project in Sharma (Tabuk) along the northern coast of the Red Sea, the statement said. Additionally, the termination will take effect from 27 May, 2026.
As of that date, 20 percent of the project work is complete. Moreover, just to note, the residual backlog stands at €1 billion.
“For this project, which had already been suspended, no revenues were expected for the current year,” the Italian contractor said.
Also, all costs incurred up to the effective date of termination and those related to the early contract halt, including site disengagement and demobilisation, will be reimbursed by Neom.
Additionally, Webuild confirmed all its activities for Neom have concluded. This comes after the cancellation of the latest contract.
Lastly, the Italian company will be “unharmed” by the termination, the statement said. Its construction backlog, net the residual activities related to the high-speed line contract, remains above €50 billion.
NEOM Industrial City Connector Project Factsheet
Project Name: NEOM Industrial City Connector (NICC) / High-Speed Rail Connector
Route Length: 57 kilometers
Design Speed: Up to 230 km/h
Core Connection: Links Oxagon (Advanced Clean Industrial Zone) with THE LINE (Linear City)
Track Configuration: Quad-track layout: 2 High-Speed Passenger Tracks + 2 Dedicated Freight Tracks
Alignment: Underground tunnels and viaducts. Additionally, it entails road bridges, underpasses along the northern Red Sea coast
Power Source: 100% clean, renewable energy (Solar, Wind, Green Hydrogen)
Main Contractor Consortium: A joint venture (JV) between Webuild (70% share, leading execution via its local branch and Salini Saudi Arabia unit) and Shibh Al Jazira Contracting Company (SAJCO) (30% share)
Contract Value: Approximately €1.4 billion (USD $1.5 billion), signed in May 2023.
Independent Safety Assessor (ISA): Awarded to a joint body composed of Egis, its subsidiary AuditSafe, and Certifer. They were to oversee transit safety metrics across high-speed, freight, and depot lines.
Systems and Pre-Concept Engineering: Additionally, SYSTRA led the international consortium covering feasibility and technology benchmarking. Also, it led the team in pre-design frameworks alongside partners including Siemens, Serco, and Arup.
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