Neom, Saudi Arabia's high-tech desert city, is heading for a dialed-down first stage as costs soar

• Amid rising costs, Saudi Arabia is scaling back Neom plans to focus on sports venues.
• Neom's plans include a stadium for the 2034 World Cup and a winter sports resort.
• The new city faces financial challenges, leadership changes, and scrutiny over human rights issues.

Saudi Arabia is changing plans for mega-city Neom to cut costs and prioritize building for international sporting events.

The Middle Eastern country will focus on completing a 1.5-mile stretch of development, including a stadium expected to host soccer's 2034 World Cup, Reuters reported on Thursday, citing people familiar with the project.

Plans for Neom were changed in September and October to integrate the World Cup stadium, a source told the news outlet. Another priority is completing a mountain resort slated to host the Asian Winter Games in 2029.

The report comes two days after Neom said, without giving a reason, that its longtime CEO abruptly left the project.

Reuters reported that Neom officials close to the ex-CEO might also leave the company soon.

Earlier this month, Neom hosted a professional triathlon and men's 3×3 basketball.

Neom did not immediately reply to a request for comment.

Scaling back a big vision

The $500 billion mega-project was slated to house 9 million people — about the same population as New York City. It includes several regions, including The Line, a proposed 106-mile horizontal structure clad in mirrors.

Neom was planned to accommodate some 1.5 million people by 2030, but that number is thought to have been scaled back considerably as costs for the project have ballooned. Estimates for Neom have swelled to as much as $1.5 trillion.

The city is a key part of Saudi Arabia's Vision 2030 project that aims to diversify the kingdom's economy away from oil by launching new industries and attracting more tourists.

The megacity has faced a series of issues since its inception, including financial problems and construction delays. Last month, a Neom official said that Saudi Arabia is using one-fifth of all the steel produced in the world, a statement Business Insider could not independently verify.

Governments and human rights groups have also scrutinized alleged human rights abuses, including of migrant workers building Neom. In July, Saudi Arabia rejected allegations that three men were sentenced to death because they criticized evictions to make way for the Neom project. It said that the men were connected to two terrorist organizations.