Saudi Arabia pauses work on Mukaab at New Murabba as project is reassessed, Reuters reports

Riyadh, Jan 27 (Saudi Arabia Breaking News) – Saudi Arabia has paused planned construction of the Mukaab, a colossal cube-shaped skyscraper at the centre of Riyadh’s New Murabba development, while it reassesses the project’s financing and feasibility, four people familiar with the matter told Reuters.

The Mukaab is the latest Vision 2030-linked gigaproject to face curbs or delays as the Public Investment Fund (PIF), Saudi Arabia’s $925 billion sovereign wealth fund, recalibrates ambitions to manage costs and prioritise spending, according to those familiar with the internal deliberations.

The shift reflects a broader pivot away from heavy expenditure on futuristic developments toward initiatives viewed as more pressing and potentially profitable, including infrastructure for World Expo 2030 and the 2034 World Cup, the Diriyah mixed-use cultural zone and the Qiddiya tourism megaproject, Reuters reported.

The repositioning comes amid mounting fiscal pressures, with oil prices below levels widely seen as necessary to fund the transformation agenda.

The Mukaab was designed as a 400-metre by 400-metre metal cube containing a dome with an AI-powered display that visitors could observe from a terraced structure more than 300 metres tall inside it.

“When you enter Mukaab, you enter another world,” New Murabba CEO Michael Dyke told a Riyadh conference in December, while noting the technical challenge of delivering something of that scale. “Trying to solve for something that doesn’t exist today, that’s quite challenging.”

Work beyond soil excavation and pilings has been suspended, while development of surrounding real estate is expected to continue, Reuters reported.

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

Reuters reported in October that PIF was shifting strategy toward sectors promising better near-term returns, including logistics, mining and artificial intelligence, amid pressure following an $8 billion writedown on gigaproject investments at the end of 2024.

Saudi Arabia is also conducting a comprehensive review of several Vision 2030 megaprojects. Economy Minister Faisal al-Ibrahim told Reuters last week that the Kingdom would be transparent about shifting, delaying or rescoping projects, without naming a specific one.

Over the weekend, Saudi Arabia announced it would indefinitely postpone hosting the 2029 Asian Winter Games planned for Trojena, another NEOM project that has faced delays. Reuters described the Mukaab as 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 to provide around 2 million square metres of interior floor space, making it the world’s largest single built structure.

Real estate consultancy Knight Frank estimated the New Murabba district would cost about $50 billion, with projects commissioned so far valued at around $100 million. The district’s completion timeline has been shifted from 2030 to 2040, Reuters reported.

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, based on earlier government estimates.

Source: Reuters