Neom uncertainty leaves $10bn joint venture in limbo

• Planned deal with DSV ‘not operational’
• Company holds exclusive logistics rights
• Contracts issued by PIF fall sharply

A multi-billion dollar joint venture between Saudi Arabia’s giga-project Neom and DSV, one of the world’s largest logistics groups, remains in limbo as tighter fiscal conditions force the kingdom to reassess priorities.

The $10 billion joint venture between Neom and DSV is emerging as a test case for how the kingdom’s project reprioritisation is leaving private sector partners exposed, with capital committed, contracts signed and returns pushed further out of reach.

DSV told AGBI in a statement after reporting its full-year 2025 results this month: “As previously mentioned, the planned joint venture is not operational, and no capital has been allocated to it.”

The company gave no update on the joint venture during its earnings call early February.

DSV’s latest annual report omitted the dedicated joint-venture section it included in its 2023 and 2024 reports.

Neom did not respond to a request for comment.

Pressure on public finances has increased as oil prices have eased, pushing the $1 trillion Public Investment Fund (PIF) to order strategic reviews and take writedowns across its giga-project portfolio, raising questions over how much of Neom will be built, and when.

DSV holds a 49 percent stake in the joint venture, announced in 2023, with the remaining 51 percent owned by PIF-backed Neom.

The business holds exclusive rights to provide logistics and transport services for Neom’s projects until 2055.

The Danish-listed company, valued at more than $60 billion, had called the deal an “important strategic growth opportunity”.

Nadhmi Al-Nasr, Neom’s CEO at the time – replaced by Aiman Al-Mudaifer at the end of 2024 – said the partnership “not only shows the reality of Neom and its vision, but also the private sector’s level of confidence”. He said projected demand across construction and non-construction logistics would make Neom “one of the largest customers in the world”.

DSV had committed to invest as much as $2.45 billion in the project but capped spending in 2025 at $100 million as project timelines slipped.

“The ramp-up in Neom has been slower than we expected,” DSV CEO Jens H Lund told shareholders at the company’s annual general meeting in August 2025.

That has had an impact on profit generation, he said.

To limit exposure, Lund said DSV – which has operated in Saudi Arabia for 20 years – structured the joint venture so it would invest only after Neom signs offtake agreements committing to use the infrastructure being built.

The joint venture was expected to create more than 20,000 job opportunities.

Mohammed Al-Jadaan, the Saudi finance minister, told the Future Investment Initiative in Riyadh in 2024 that “Neom is a 50-plus-year plan”, adding that anyone expecting the project “in its grand size” to be built, fully operational and profitable within five years was “foolish”: “We are not foolish. We are wise people.”

Neom, the $500 billion desert city, is a centerpiece in Crown Prince Mohammed bin Salman’s Vision 2030 plan to diversify the economy away from oil. 

Neom groups the Oxagon, Trojena, Sindalah and The Line projects in a 26,500 square kilometre Red Sea zone – more than 30 times the size of Singapore.

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Oxagon has been built, while the rest of Neom is being restructured and jobs are being cut. 

This month, in a first public acknowledgement of shift in priorities, Khalid Al Falih, Saudi’s former investment minister, now replaced by Fahad AlSaif, said Neom and its centrepiece “The Line” are pushed down the pecking order as the state diverts spending toward construction needed for the 2034 World Cup and Expo 2030.

Contracts issued by the PIF have fallen sharply since last year, coinciding with a fall in the oil price from an average of $81 a barrel to around $66.