Saudi Arabia suspends work on massive Mukaab megaproject

Saudi Arabia has suspended planned construction of a colossal cube-shaped skyscraper, Mukaab, at the centre of a downtown development in Riyadh while it reassesses the project’s financing and feasibility, four people familiar with the matter said.

The Mukaab, at the center of Riyadh’s New Murabba development, is the latest fantastical gigaproject linked to Saudi Arabia’s Vision 2030 to be curtailed or delayed as the kingdom’s $925 billion sovereign wealth fund scales back ambitions to manage costs and prioritize spending.

Saudi Arabia is pivoting from heavy expenditure on futuristic projects that have dominated Crown Prince Mohammed bin Salman’s Vision 2030, such as NEOM’s The Line, to initiatives seen as more pressing and potentially profitable.

Projects in focus now include infrastructure for World Expo 2030 and the 2034 World Cup, the sprawling $60 billion Diriyah mixed-use cultural zone and the Qiddiya tourism megaproject, five people familiar with the matter said.

The repositioning also reflects mounting fiscal pressures as oil prices remain well below levels needed to fund the ambitious transformation agenda.

WORK BEYOND SOIL EXCAVATION, PILINGS SUSPENDED

The Mukaab was planned as a 400-metre by 400-metre metal cube containing a dome with an AI-powered display, the largest on the planet, that visitors could observe from a more than 300-metre-tall ziggurat – or terraced structure – inside it.

“When you enter Mukaab, you enter another world,” CEO Michael Dyke told attendees at a Riyadh conference in December, acknowledging difficulties realizing the project.

“Trying to solve for something that doesn’t exist today, that’s quite challenging,” he said.

Its future is now unclear, with work beyond soil excavation and pilings suspended, three of the people said. Development of the surrounding real estate is set to continue, five people familiar with the plans said.

The sources include people familiar with the project’s development and people privy to internal deliberations at the PIF.

Officials from PIF, the Saudi government and the New Murabba project did not respond to requests for comment.

PIF SHIFTING FOCUS TO LOGISTICS, AI, MINING

Reuters reported in October that the PIF was shifting strategy to focus on logistics, mining, AI and other sectors promising better near-term returns, as pressure mounted following an $8 billion writedown on gigaproject investments at the end of 2024.

The kingdom is currently conducting a comprehensive review of several Vision 2030 mega projects.

Saudi Economy Minister Faisal al-Ibrahim told Reuters last week: “We’re very transparent. We’re not going to shy away from saying we had to shift this project, delay it, re-scope it,” without mentioning a specific project.

Over the weekend, Saudi Arabia said it would indefinitely postpone hosting the 2029 Asian winter Games set to take place at Trojena, another NEOM megaproject that has faced delays.

But the Mukaab is the first project in the Saudi capital reported to be reassessed for feasibility.

The structure was billed as large enough to fit 20 Empire State Buildings, and feature around 2 million square meters of interior floor space, making it the world’s largest single-built structure.

NEW MURABBA WOULD COST $50 BILLION, SAYS KNIGHT FRANK

Real estate consultancy Knight Frank estimated the New Murabba district would cost about $50 billion – roughly equivalent to Jordan’s GDP – with projects commissioned so far valued at around $100 million.

Initial plans for the New Murabba district called for completion by 2030. It is now slated to be completed by 2040.

The development was intended to house 104,000 residential units and add 180 billion riyals to the kingdom’s GDP, creating 334,000 direct and indirect jobs by 2030, the government had estimated previously.

The Mukaab’s design drew some social media criticism when it was unveiled for its resemblance to the Kaaba, the sacred structure at the center of Masjid al-Haram in Mecca that serves as Islam’s holiest site, towards which Muslims pray.