The developer of NEOM has terminated a major tunnel construction contract valued at approximately USD 1 billion, originally awarded to a consortium led by Samsung C&T and Hyundai Engineering & Construction, due to project restructuring.
According to a regulatory filing issued by Hyundai Engineering & Construction on March 13, the contract cancellation was communicated by NEOM Company, the developer behind the futuristic city project located in the Tabuk Province. The termination notice was received by the contractor a day earlier.
The project, originally awarded in June 2022, involved the construction of a 12.5-kilometer underground tunnel beneath The Line—NEOM’s flagship linear urban development. The tunnel was planned to accommodate critical transportation infrastructure including highways, metro systems, and freight rail lines, forming a key part of the integrated mobility network envisioned for the city.
The contract had been secured by a consortium comprising Samsung C&T, Hyundai Engineering & Construction, and Greek construction firm Archirodon. The total contract value was estimated at USD 1 billion, with Hyundai E&C’s share previously disclosed at approximately KRW 723.1 billion.
According to Hyundai E&C, the termination was requested by the client due to project restructuring, reflecting ongoing adjustments within the broader development plans for NEOM.
The contract was initially scheduled to run until December 29, 2025. The cancellation comes as NEOM continues to refine and restructure several components of its large-scale infrastructure and urban development initiatives.
NEOM is one of Saudi Arabia’s most ambitious giga-projects and a central pillar of the Kingdom’s long-term economic diversification strategy under Vision 2030, aiming to create a next-generation urban ecosystem powered by advanced technology, sustainable infrastructure, and innovative mobility systems.
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