Italian construction giant Webuild said that Saudi Arabia’s futuristic city project NEOM has terminated its contract for the Connector High-Speed Line project in Tabuk, in the latest development involving the kingdom’s flagship $500 billion mega-project.
The Milan-based company said the termination will take effect on May 27, 2026, with construction on the rail project approximately 20% complete.
In a press release, Webuild said: “Saudi Arabia's NEOM has terminated a contract for a high-speed railway line along the northern coast of the Red Sea. The termination will take effect from May 27, 2026. As of that date, the progress of works stands at approximately 20%, with a residual backlog for Webuild of around €1 billion.”
The Connector High-Speed Line was part of infrastructure plans designed to support NEOM’s transport network along the Red Sea coast in northwestern Saudi Arabia.
For this project, which had already been suspended, no revenues were expected for the current year, Webuild said.
"All costs incurred up to the effective date of termination, as well as those related to the early termination of the contract, including site disengagement and demobilisation activities, will be reimbursed by the client, holding the group harmless from the effects of the termination, in accordance with the contract and applicable law," it said.
With this termination, all of Webuild’s activities for NEOM have been concluded. Webuild’s construction backlog, net of the remaining activities related to the Connector High-Speed Line project, remains above €50 billion, it said.
The cancellation follows NEOM’s earlier decision in March to end Webuild’s contract for a three-dam system project that carried a backlog value of €2.8 billion.
NEOM, a centerpiece of Crown Prince Mohammed bin Salman’s Vision 2030 strategy to diversify the Saudi economy beyond oil, has faced mounting scrutiny over costs, timelines and project scaling as the kingdom reassesses spending priorities.
The Connector High-Speed Line was part of infrastructure plans supporting the futuristic city project in northwestern Saudi Arabia.