Saudi Arabian flagship mega resort Neom has served a termination notice on Malaysian structural steel contractor Eversendai Corporation Berhad for its contract at the Trojena ski village, the second cancellation by the Saudi giga-project developer this month, industry blog Nemma reported on March 24.

Saudi Arabia has sharply scaled back funding and ambitions for its flagship NEOM megaproject as lower oil revenues, cost overruns and delays force a broader rethink of Vision 2030 spending priorities.

Authorities have slowed construction spending tied to the Public Investment Fund (PIF), with overall PIF construction contracts falling from about $7bn in 2024 to roughly $30bn in 2025, a drop of nearly 60%, as capital is redirected from giga-projects such as NEOM towards infrastructure for Expo 2030 in Riyadh and the 2034 FIFA World Cup

Eversendai said the termination would take effect on March 26. The contract had been awarded in March 2024 and was being executed in collaboration with Saudi Arabia's Al Bawani Company. No contract value was disclosed.

"We believe this has happened due to the current geopolitical situation in the Middle East," Eversendai said in a stock exchange statement, adding that it had fully delivered the project in line with contractual obligations with no compromise to safety or quality.

The contractor said it was preparing documents to support commercial claims for termination and demobilisation costs, which it said Neom was obligated to meet.

Two weeks ago, Neom cancelled a tunnelling contract worth roughly $1bn at The Line, its flagship linear city development. Trojena had been scheduled to host the Asian Winter Games in 2029 before Saudi Arabia withdrew from the hosting commitment in January.

Eversendai described Trojena as its "largest and most challenging project" in its 2024 annual report. Its order book stands at $510mn excluding the remaining Trojena works, with a tender book of $4.6bn. The company is also working on the expansion of Hamad International Airport in Qatar.

Saudi Arabia has been reviewing giga-project spending since 2024, as rising costs, execution difficulties, and lower crude prices have exposed contractors to cancellations. The regional conflict has added pressure, disrupting Strait of Hormuz shipping and constraining Saudi crude exports even as Brent approached $120 a barrel before easing to around $100.

Neom, the $500bn futuristic desert development backed by the Public Investment Fund, is the centrepiece of Crown Prince Mohammed bin Salman's Vision 2030 programme.

The retrenchment of funds at NEOM is due to challenges facing Crown Prince Mohammed bin Salman’s drive to diversify the economy away from oil, as exports fall below levels once assumed for funding mega‑projects.

They add that while authorities insist NEOM remains a “generational investment”, the project’s scale‑back marks the end of the most expansive phase of Vision 2030 and a shift towards more tightly sequenced, commercially driven development.