Neom, Pt 2: The Emperor’s New Clothes

Summary

Podcast Summary: The Journal – Neom, Pt 2: The Emperor’s New Clothes

Release Date: April 26, 2025

Introduction

In the second installment of their deep dive into NEOM, The Journal delves into the intricate dynamics and challenges that have characterized one of the most ambitious urban projects of the 21st century. Hosted by Ryan Knutson, alongside contributions from experts like Tony Harris and Andy Wirth, this episode, titled "The Emperor’s New Clothes," uncovers the tumultuous management, escalating costs, and cultural clashes that have plagued NEOM’s development.

---

Leadership and Management Style

A Toxic Leadership Culture

The episode opens with Ryan Knutson recounting the initial impressions of Tony Harris, an education expert who joined NEOM a few months into his role. Harris describes a startling encounter with NEOM’s CEO, Naadmi Al Nasser.

Tony Harris [00:35]: "He called everyone together and he literally started screaming and shouting. It was as though your 4-year-old was having a tantrum on the floor."

This aggressive management style is further illuminated by Rory Jones’ reporting, highlighting Al Nasser’s reputation for ruthless execution.

Rory Jones [03:03]: "We heard this recording of Naadmi describing how he runs projects and he says, 'I drive my people like slaves. That's how I get my projects done. I drive everybody like a slave. And when they drop down dead, I celebrate.'"

Such behavior created an environment of constant fear and stress among employees, leading to high staff turnover and a toxic workplace atmosphere.

---

Spending Practices and Financial Mismanagement

The Obsession with Expenditure Speed

One of the most surprising aspects discussed is NEOM’s prioritization of the speed at which funds are spent over the effectiveness or impact of projects.

Tony Harris [05:52]: "One of the most important metrics NEOM uses to evaluate projects is the speed at which you spend money. It's not about how effective was the project, how many people did it reach? How many lives did it change? No, it's about how quickly you spend money."

This led to excessive and often unfocused spending, with projects like an online leadership program for kids receiving disproportionately large budgets.

Tony Harris [06:38]: "No, we couldn't spend money quickly enough. We could not spend money quickly enough."

Similarly, Andy Wirth shares his frustration with budgetary expectations versus feasible spending.

Andy Wirth [08:09]: "For this fiscal year, I was supposed to have spent six or seven hundred million dollars. And I couldn't feasibly conceive of a way to expend that sum of money between July and the end of that year."

Reliance on Consultants

NEOM’s heavy dependence on external consultants, such as McKinsey and PricewaterhouseCoopers, rather than leveraging internal expertise, was a significant issue.

Tony Harris [10:00]: "They didn't want us to make any decisions. What they did want us to do was to hire one of the aforementioned consulting companies to research the issue and make a recommendation."

This strategy was perceived as a way for NEOM’s leadership to deflect accountability, ensuring that failures could be blamed on external advisors rather than internal decisions.

---

Project Challenges and Escalating Costs

Ambitious yet Impractical Designs

NEOM’s master plans, particularly for the mountain region (later renamed Trojena), were characterized by overly ambitious and often unrealistic architectural designs.

Andy Wirth [12:39]: "They were intriguing, they were extremely creative, extremely out there, and I'm an open-minded fella. Some of them seemed outlandish, some of them seemed very creative."

Projects like "The Vault," a glass building requiring the dynamiting of part of a mountain, and the infamous "Line"—a 106-mile long skyscraper stretching into the desert—highlighted the disconnect between vision and practicality.

Tony Harris [19:08]: "Come on, nobody's going to live in a structure like that. When you're inside there, it's going to have the atmosphere of an airport terminal or a shopping mall."

Internal Audits and Financial Irregularities

An internal audit in 2024 revealed a pervasive culture of excessive spending without tangible progress. NEOM executives often manipulated financial metrics like the Internal Rate of Return (IRR) to mask escalating costs.

Elliot Brown [16:00]: "They wanted to have these buildings make money. So they said everything needs to get, you know, around 9% IRR."

This manipulation prevented a realistic assessment of NEOM’s financial health, allowing the project to continue unsustainably.

---

Cultural Clash and Employee Dissatisfaction

Clashing Visions

A fundamental clash existed between NEOM’s purported vision of a liberal, progressive city and the harsh, traditional leadership style of CEO Naadmi Al Nasser. Employees who envisioned NEOM as a hub of innovation and freedom were instead confronted with authoritarian management.

Rory Jones [35:20]: "NEOM is supposed to be this place where people go and they're free thinking... then they would, you know, according to this audit and the former employees we talked to essentially delude him with how well it was looking on paper."

Attempts to Implement Change

Executives like Andy Wirth attempted to propose more sustainable and realistic development plans. However, these efforts were met with severe backlash from Al Nasser, further exacerbating the toxic environment.

Andy Wirth [27:07]: "Word got out and he absolutely bleeding from his eyeballs screaming at you."

---

Departures and Leadership Turnover

Exodus of Key Personnel

The unsustainable working conditions and mismanagement led to the swift departure of key figures like Andy Wirth and Tony Harris. Their exit underscored the deep-seated issues within NEOM’s leadership.

Andy Wirth [28:33]: "They'd say, 'Andy, haven't you heard? You carry two buckets over here. One's filled with gold and one's filled with horse.'"

CEO Naadmi Al Nasser’s Departure

Following the failed launch of NEOM’s first development, Sindalah, and the absence of Crown Prince Mohammed bin Salman (MBS) at the grand opening, Naadmi Al Nasser was ousted as CEO. This marked a significant turning point for the project.

Rory Jones [34:09]: "Within weeks, Naadmi leaves as the CEO."

---

Current Status and Future of NEOM

Shift in Control and Budget Realizations

Post-Al Nasser, Saudi Arabia’s Sovereign Wealth Fund (PIF) has taken a more hands-on approach in managing NEOM, confronting the project's massive budget overruns. Reports suggest the total capital expenditure has ballooned to an unprecedented $8.8 trillion.

Elliot Brown [36:36]: "We saw one document that was a draft presentation to the board last year that put the total capital expenditure of the full NEOM build out at $8.8 trillion."

Comparative Progress in Saudi Arabia

Interestingly, while NEOM struggled, Saudi Arabia’s broader initiatives under MBS have succeeded in diversifying the economy and fostering a burgeoning entertainment and tourism sector. This has somewhat diminished the centrality of NEOM to the kingdom’s modernization efforts.

Rory Jones [37:44]: "Saudi Arabia now has an entertainment sector and a tourism industry. Most importantly, it's less dependent on oil."

Future Outlook

Despite the setbacks, NEOM is unlikely to be abandoned entirely due to its symbolic significance for MBS. However, expectations indicate a likely scaling back of the project’s original ambitions, aligning more closely with feasible developmental goals.

Rory Jones [38:35]: "NEOM's not gonna go away or gonna be canned completely. MBS has tied his reputation to NEOM, and so it's still an important project for him."

---

Conclusion

“The Emperor’s New Clothes” paints a comprehensive picture of NEOM’s rise and struggles, highlighting the detrimental effects of mismanagement, unrealistic ambitions, and cultural misalignment. While the project remains a testament to visionary capitalism, its future depends on a fundamental restructuring of leadership and a shift towards more sustainable and pragmatic development practices.

Notable Quotes:

• Tony Harris [00:35]: "He literally started screaming and shouting. It was as though your 4-year-old was having a tantrum on the floor."
• Naadmi Al Nasser [03:03]: "I drive my people like slaves. That's how I get my projects done."
• Andy Wirth [08:09]: "I couldn't feasibly conceive of a way to expend that sum of money between July and the end of that year."
• Tony Harris [19:08]: "Come on, nobody's going to live in a structure like that."
• Andy Wirth [28:33]: "You carry two buckets over here. One's filled with gold and one's filled with horse."

Timestamped Insights:

• Leadership’s Abrupt Style: [00:35] - [03:23]
• Spending Speed Over Substance: [05:52] - [08:26]
• Consultant Dependency: [10:00] - [10:55]
• Project Escalations: [12:36] - [18:50]
• Cultural Clash and Attempts at Change: [19:38] - [28:28]
• Departures and Aftermath: [28:33] - [35:20]
• Current Situation and Future Prospects: [35:20] - [39:11]

---

Credits

Produced by Annie Minoff and edited by Kathryn Brewer. Additional reporting by Stephen Kaelin and Summer Saeed. Fact-checking by Kate Gallagher. Sound design by Griffin Tanner. Music by Emma Munger, Griffin Tanner, and Blue Dot Sessions.

---

For more insights and detailed stories on money, business, and power, subscribe to The Journal co-produced by Spotify and The Wall Street Journal.

Transcript

[Ryan Knudson]

Tony Harris, the education expert you heard from in the last episode, was just a few months into his job at NEOM when he got his first real impression of the project's CEO, Naadmi Al Nasser.

[Tony Harris]

He called all of us together and at that point I think there were about between 4 and 500 people at the camp at that time.

[Ryan Knudson]

The denizens of NEOM piled into the camp's cafeteria. Saudis expats.

[Tony Harris]

He called everyone together and he literally started screaming and shouting. It was as though your 4 year old was having a tantrum on the floor.

[Ryan Knudson]

What was he saying when he was yelling?

[Tony Harris]

He was admonishing people for not working hard enough essentially was his message. And what was going through my mind was this can't actually be happening. And I thought to myself, okay, very soon what's going to happen? He's going to stop his performing and somebody's going to come in and there's going to be some interesting intervention and there's going to be some little lesson about how not to manage. But oh no, this was for real. This was for real. I was shocked. I mean, you know, I have lived all over the world, I've taught all over the world. I've encountered people from different cultures. I've never seen anything like this.

[Rory Jones]

Nadmi Al Nasser has built a reputation over the decades of getting things done.

[Ryan Knudson]

Reporter Rory Jones.

[Rory Jones]

Like he is a doer who is going to execute and he's going to bludgeon his way through whatever project he's working on and he's going to get it finished on budget and on time. And this is the kind of guy that MBS brings into the project pretty early on.

[Ryan Knudson]

Mohammed bin Salman, Saudi Arabia's crown prince, on a mission to construct what amounted to a brand new futuristic city state within his country. NEOM was his vision, his baby. But every visionary needs a right hand man. MBS's was Nodmi. Nodmi, everyone we talked to, called him by his first name, became Neom's CEO in 2018. He's an engineer by training with round glasses and a trim salt and pepper mustache. He came to the CEO job with a track record of delivering on big projects. He'd expanded Saudi Arabia's biggest oil field in the 90s and built a new university complex on the Red Sea. And according to Rory's reporting, he made no apologies for his, let's call it, aggressive management style.

[Rory Jones]

We heard this recording of Naadmi describing how he runs projects and he says, I drive my people like slaves. That's how I get my projects done. I drive everybody like a slave. And when they drop down dead, I celebrate.

[Ryan Knudson]

That's me. When they drop down dead, I celebrate, said Nodmi in a private meeting. We reached out to him for an interview, but he didn't respond. People like Tony and Andy the ski executive had moved thousands of miles from home to the middle of the desert to help build neom. But they were quickly realizing that there was something strange about this place. It wasn't just the project's screaming CEO. NEOM was also bleeding money. Dysfunction reigned and very little was actually being built. How long did it take you before you started to think, this is not something that I want to be part of?

[Andy Wirth]

It was in the neighborhood of maybe a month and a half, two months.

[Ryan Knudson]

That quickly?

[Andy Wirth]

Oh yeah, and that's. I'm actually probably being generous.

[Tony Harris]

I think that honeymoon period lasted for probably a month or so. And then we started asking questions.

[Ryan Knudson]

Welcome to the Journal, our show about money, business and power. I'm Ryan knudsen. It's Saturday, April 26th. This episode is the second in our two part deep dive into Neom. Today's episode the Emperor's New Clothes. The missing child is Lucia Blix, 9 years old. Please let her come back home safely. Thursdays the kidnappers plundit meticulously if money is what it takes to get her back, we're going to pay it. The secrets they hide. You can't talk about this.

[Tony Harris]

You can't write about it.

[Ryan Knudson]

Are the clues.

[Tony Harris]

The mother's hiding something. I know it.

[Ryan Knudson]

To find her, tell me where she is. The stolen girl New episodes Thursdays stream on Hulu. To Tony, one of the most surprising things about NEOM was how people approached spending.

[Tony Harris]

One of the things that emerged, which I found absolutely fascinating was one of the most important metrics NEOM uses to evaluate projects is the speed at which you spend money. Now just let that sink in a little bit. The speed at which you spend money. It's not about how effective was the project, how many people did it reach? How many lives did it change? No, it's about how quickly you spend money.

[Ryan Knudson]

Were you spending enough money?

[Tony Harris]

No, we couldn't spend money quickly enough. We could not spend money quickly enough.

[Ryan Knudson]

Tony recalls one project he worked on, a hackathon and online leadership program for kids. The idea was to promote NEOM's education efforts. There really weren't any kids at NEOM yet, since it was still mostly a construction site. So the leadership program was online. And when Tony learned how much he'd been authorized to Spend on it. He was flabbergasted. Half a million dollars.

[Tony Harris]

In my world, it would have been about 10% of that.

[Ryan Knudson]

$50,000.

[Tony Harris]

Yes. Instead of 10 times that. So, you know, I went with the flow, believe me.

[Ryan Knudson]

Did you spend half a million dollars?

[Tony Harris]

Yes. And look, it was a successful project, as it should have been.

[Ryan Knudson]

Half a million dollars for some online webinars. For Andy over at neom's Mountain Development, it was the same story.

[Andy Wirth]

It was. Gosh, a couple months into it, we had these. I think there's something like a town hall meeting.

[Ryan Knudson]

As Andy remembers it, Nodmi had called all of NEOM's sector heads together. Andy plus the heads of the sports sector, the health sector, biotech, energy. Nadmi's message.

[Andy Wirth]

It was, if each of the sector heads don't spend the money that was allocated in this quote, unquote, fiscal year, it'll be brought before the founding board to explain why. And for this fiscal year, calendar year, I think I was supposed to have spent six or seven hundred million dollars.

[Ryan Knudson]

Six or seven hundred million dollars. Andy says he'd only managed to spend two or three hundred thousand.

[Andy Wirth]

And I couldn't feasibly conceive of a way to expend that sum of money between July and the end of that year.

[Ryan Knudson]

Why did they want you to spend so much money?

[Andy Wirth]

Oh, you know, even in our country, you have the government approach to if you don't, you know, spend it or lose it. But it was, I think it was honestly an embarrassment to nod me. It was an expression of progress to have expended these funds. And therefore, if they weren't expended, that, that would be a very direct indication of a lack of progress.

[Ryan Knudson]

Money's being spent and therefore we are working evidence.

[Andy Wirth]

That's right.

[Ryan Knudson]

What were you spending money on in the time that you were there?

[Andy Wirth]

Consultants and master planners and subcontractors to feed the master planning process.

[Ryan Knudson]

In 2024, NEOM would conduct an internal audit and the auditors would call out this culture of spending. They described neom's CEO Nodmi as having a spend the budget strategy. But very little of that budget was actually going to build stuff. Instead, it was going to consultants. Remember, consultants had played a key role in the early days, coming up with ideas for neom. But years into the project, NEOM had its own staff of experts, people like Tony and Andy. And still, neom's executives leaned heavily on consultants. According to people familiar with NEOM spending, in a single year, Neom paid McKinsey $130 million and PricewaterhouseCoopers 260 million. Here's Tony again.

[Tony Harris]

They didn't want us to make any decisions. What they did want us to do was to hire one of the aforementioned consulting companies to research the issue and make a recommendation.

[Ryan Knudson]

Why?

[Tony Harris]

Very, very curious. Now I thought about that myself.

[Ryan Knudson]

One reason Tony eventually concluded was that it was a way for neom's bosses to protect themselves.

[Tony Harris]

If the project fails or there's a problem, I can always turn around and say, look, it's not me. We paid these guys and their associates. Don't blame me. Nobody ever wants to take responsibility. And one understands why not. Because the system of management over there is ruthless and so people are afraid to make decisions.

[Ryan Knudson]

Make a mistake and you might just find yourself being berated by Nodmi. According to people who worked with him, Nodmi once told an executive in a meeting to walk out into the desert and die so that he could urinate on his grave. Another time, after a deal fell through, he gathered his staff and demanded to know why he hadn't been given a heads up. He said, quote, if you don't tell me who is responsible, I'm going to take a gun from under my desk and shoot you. This is according to people with knowledge.

[Andy Wirth]

In the meeting, it was full on the shining, Jack Nicholson type stuff.

[Ryan Knudson]

As one of Nanme's direct reports, Andy says he both witnessed and was on the receiving end of the CEO's wrath.

[Andy Wirth]

I never even conceived of somebody in a leadership role having this disposition. I didn't think it would actually ever exist. I never thought I'd actually see it.

[Ryan Knudson]

What impact do you think that his style had on the overall project and the people who work there?

[Andy Wirth]

The impact it had on everybody in the organization was one of constant fear. Constantly anywhere near his presence. Walking on eggshells and or ice. You just didn't know if it was gonna break through and he was gonna lose his.

[Ryan Knudson]

NEOM says employee welfare is a top priority and that workers are encouraged to anonymously voice concerns. A spokeswoman also said the project has a robust governance framework and takes expert advice into consideration when making decisions. Neom's designs were ambitious and that was also true for NeoMountain. Soon after joining the project, Andy got his first real peek at the plans for the mountain region.

[Andy Wirth]

And?

[Ryan Knudson]

And they were an eyefall.

[Andy Wirth]

They were intriguing, they were extremely creative, extremely out there, and I'm an open minded fella. Some of them seemed outlandish, some of them seemed very creative.

[Ryan Knudson]

They included plans for something called the Vault, a glittering glass Building filled with stores and hotels that Andy said they were going to have to dynamite part of a mountain to build.

[Andy Wirth]

My first thought was, huh, who's going to come here for this? Why would you actually go to Saudi Arabia from anywhere to go to this? And this didn't make any sense.

[Ryan Knudson]

Did you think it looked cool?

[Andy Wirth]

No, I thought it looked ludicrous. It looks inane. It was actually. It was just. Let me go straight to it. It looked idiotic.

[Ryan Knudson]

The master plan also called for an artificial lake with a dam that bowed outward in defiance of traditional engineering. Plus that desert ski resort Danny was trying to build. And that wasn't all talk about the palaces.

[Andy Wirth]

So you ask about the palaces, but you have to bundle them together with the mansions. I found out that we were to build. I think it was a neighborhood of 40 mansions and 15 palaces in the mountain environment.

[Ryan Knudson]

The Wall Street Journal obtained some early concept art for these mansions and palaces, and the designs are wild. One palace looks like a ribbon of molten metal suspended over a canyon. Another reminded me of the Eye of Sauron from the Lord of the Rings. The pointy black tower with a red light beaming out the top.

[Andy Wirth]

Who's buying these, by the way?

[Ryan Knudson]

To Andy, the mansions and palaces just.

[Andy Wirth]

Didn'T make sense because there was no demand model. There's no sensibility to it. So honestly, it was an extremely perfect, more of the same stupidity way of thinking that seemed to permeate the project.

[Ryan Knudson]

Neo Mountain was getting more expensive. It's a trend that would continue long after Andy left the project. Reporter Elliot Brown saw some internal neom documents from 2023. By this time, Neo Mountain had been renamed trojena.

[Elliot Brown]

So in 2021, the documents estimate that Trojena was going to cost about $18 billion. And then by 2022, it's jumped up to $27 billion. And then by 2023, toward the end of the year, when this presentation's from, it is $39 billion.

[Ryan Knudson]

And this was happening at projects all across Neom. But as Neom's costs ballooned, it didn't seem to change the project's course. That 2024 audit NEOM conducted suggests one reason why Elliott got a look at a version of that audit.

[Elliot Brown]

It was labeled final Draft, and it's pretty damning.

[Ryan Knudson]

According to NEOM's auditors and Elliot's own reporting, as costs rose, rather than push for cutbacks to neom, executives sometimes just fudge the numbers.

[Elliot Brown]

So there was this measure that the Crown Prince really cared about. It's called irr, or Internal rate of return that's very commonly used by real estate developers and private equity.

[Ryan Knudson]

IRRs are basically the percentage of a project's costs that come back to you every year as profit. Now, a lot of what Saudi Arabia was spending on at NEOM wasn't supposed to make money. It was infrastructure stuff like roads and utilities. But other stuff definitely was supposed to be profitable, like the hotels or the apartments they were going to sell on the line.

[Elliot Brown]

They wanted to have these buildings make money. So they said everything needs to get, you know, around 9% IRR.

[Ryan Knudson]

As Neom's costs grew, Elliot's reporting shows that executives manipulated the IRRs to keep them around that 9% sweet spot.

[Elliot Brown]

So you can see this with Trojena in this fall 2023 document we have, you can see that they had a glamping site.

[Ryan Knudson]

Glamping like this is sort of, you know, what do they call glamorous camping? Like, sort of fancy tents.

[Elliot Brown]

Yeah. And they originally were estimating that they'd get $216 a night. Well, after costs went up, they looked at it closer and said, well, actually, we were readjusting that to $704 a night.

[Ryan Knudson]

$704 a night for glamping Must be really glammed up.

[Elliot Brown]

A boutique hiking hotel. The rooms were originally targeted for $489 a night. And, you know, then they said, actually, we're gonna get $1,866 a night. It fixed the problem because the costs had hurt the IRR and it was down to 7%. And then they added the changes to the hotel rooms, and it brought them up to 9.3%.

[Ryan Knudson]

How widespread was this practice?

[Elliot Brown]

It was common. We've talked to a lot of people who took part in it.

[Ryan Knudson]

Manipulating the IRRs meant that Neom's executives didn't have to confront their higher ups, MBS in particular, with the realities of cost. An added dollar of projected cost could just be balanced out by another dollar of expected profit. They could keep the NEOM dream going. Buoyed by fuzzy math. Elliot says it's an arrangement that seemed to suit both MBS and the people working for him.

[Elliot Brown]

We call it a mutual dance of delusion. The crown prince would go to the people running NEOM and say, I want completely crazy architecture that defies what we know about how buildings are built, as though it could sort unrealistically, and then they would, you know, according to this audit and, you know, the former employees we talked to essentially delude him with how well it was looking on paper.

[Ryan Knudson]

Elliot calls it a mutual dance of delusion. Tony Harris has another term for it.

[Tony Harris]

The emperor has no clothes.

[Ryan Knudson]

To Tony, MBS was the emperor in the fable, parading around in the nude while his advisors complimented him on his new suit. And nowhere was this dynamic more evident than with the line. MBS's plan for those massive parallel skyscrapers running 106 miles into the desert.

[Tony Harris]

Come on, nobody's going to live in a structure like that. When you're inside there, it's going to have the atmosphere of an airport terminal or a shopping mall.

[Ryan Knudson]

Tony didn't work on the Line, but the schools he was building were supposed to be housed in it. From the beginning, people at NEOM had concerns about the Line. You get a flavor of them. In an internal document Rory and Elliot saw, they collected staff feedback on the design after MBS first proposed it.

[Elliot Brown]

At the end of the document, they have 20 pages of comments sort of highlighting risks and concerns.

[Rory Jones]

A lot of like, the comments were bordering, you know, on disbelief, essentially. Like, one of them I remember was like, cost will be astronomical.

[Elliot Brown]

Will mean NEOM will need to absorb significant building infrastructure cost as sunk investment to attract investment.

[Rory Jones]

Another one was like, we're letting design.

[Elliot Brown]

Lead, use, use will usually drive design. We are using design to drive use.

[Rory Jones]

You know, people are saying like, we're really not like building something here that people are wanna gonna live and work in. We're really letting our imagination drive the thinking here.

[Ryan Knudson]

People also singled out practical issues. The Line would negatively affect neom's wind.

[Elliot Brown]

Farm because the height and continuous nature of the line will create wind shade. When wind comes from the north or.

[Ryan Knudson]

South, many, many birds would die.

[Elliot Brown]

The large mirrored surface of the walls of the structure would likely cause extensive losses in bird populations due to bird strikes. So were there concerns? There were enormous number of concerns. The question is more how deeply did those get voiced at.

[Ryan Knudson]

According to Rory and Elliot's reporting, the answer is not so much. Instead, MBS's executives shielded him from the full scope of Neom's challenges and costs. To Tony, it was baffling right in front of us.

[Tony Harris]

Is this craziness if someone would just say to him, it's not a good idea to build a middle school 300 meters up in the sky in a glass tunnel in the middle of the desert? That doesn't sound like a great idea, does it?

[Ryan Knudson]

Did you have an urge or any inability to be the one to say that?

[Tony Harris]

The urges were always there, but if you wanted your job, I mean, they brooked absolutely no Dissension, zero. The slightest wavering, the slightest sign of resistance, you were out on your ear. And that was made very, very clear.

[Ryan Knudson]

How did they make it clear that you'd be sort of fired if there was any dissent?

[Tony Harris]

By witnessing people who were fired.

[Ryan Knudson]

Elliott and Roy's reporting confirms that employees were often fired for challenging higher ups on NEOM's costs and feasibility. A NEOM spokeswoman said that NEOM champions excellence, professionalism, diversity and ethical conduct, end quote. And requires staff to uphold those values. Did anybody around MBS play the role of bad cop?

[Andy Wirth]

To the best of my knowledge, no.

[Ryan Knudson]

Ski executive Andy Wirth again. So that must have been a strange position for you to be in, working at this. Like your job is to build out this resort, but like it's only a few months in where you're starting to see, well, this isn't possible.

[Andy Wirth]

Yeah, they're not plausible, they're not possible, they're lunacy and more.

[Ryan Knudson]

But so what do you do as an executive who has a history of getting things done in an environment where you don't think the goals are achievable?

[Andy Wirth]

Try and change it.

[Ryan Knudson]

Did you try to change it?

[Andy Wirth]

Yes.

[Ryan Knudson]

How that went is after the break.

[N/A]

This episode is brought to you by Lifelock. Not everyone is careful with your personal information, which might explain why there's a victim of identity theft every five seconds in the U.S. fortunately, there's LifeLock. LifeLock monitors hundreds of millions of data points a second for threats to your identity. If your identity is stolen, a US based restoration specialist will fix it, guaranteed, or your money back. Save up to 40% your first year by visiting lifelock.com podcast terms apply.

[Ryan Knudson]

One of Andy's favorite things to do at Neom was go hiking up in the mountains.

[Andy Wirth]

I just loved getting into the backcountry and I did that many times alone, just solo hiking back there.

[Ryan Knudson]

Sometimes he'd camp overnight. One of his favorite spots was a literal oasis with palm trees jutting out of the desert rock. The hikes irked his boss, Nodmi.

[Andy Wirth]

I got in so much trouble with Nodmi, which I didn't care at all about him. And getting in trouble with him, it was something I found great pleasure in, actually. By the time I left, Andy was.

[Ryan Knudson]

Quickly souring on Neom. The plans for Neom Mountain just didn't make sense to him and he was increasingly worried about their impact on Neom's pristine mountains.

[Andy Wirth]

These areas, Ryan, are beautiful. They are absolutely gorgeous and beautiful. And you know, if you go to parts of Arizona and you see High mountain desert and you see the mountainous areas, whether they be red rock or other, they're still starkly beautiful. This area is beautiful. If you and I had gone to Moab, Utah in the 30s, before Mountain Cut bikes were even conceived of, this is what that was like. It was warm because it was June, July, August, I didn't mind that. But it's intriguing. I thought it was beautiful and to go in there and to destroy it made no sense. And frankly quickly became quite angered about the whole deal.

[Ryan Knudson]

Andy spent much of his career running ski resorts. So he's definitely not the kind of environmentalist who wants to shut people out of nature. He wants them in it, but not at the expense of destroying a place. He believes development can and should be balanced with conservation. And he was not seeing that balance at Neom Mountain.

[Andy Wirth]

Not only was it creative stupid, it was creative destructively.

[Ryan Knudson]

What was the thing that would have destroyed it?

[Andy Wirth]

The most of the top 10, vault number one, the reservoir or lake number two, number three, some of the other, smaller, if you will, developments, the hospitality properties. It's so much in the way of high explosives and destruction of a landscape that it's hard to even conceive of.

[Ryan Knudson]

And then Andy learned that MBS himself knew these mountains.

[Andy Wirth]

I found out from some of the folks close to the royal family that the Crown Prince had spent many of his formative years around this area. And so I started developing an appeal to him directly to MBS to shut down some of these things that were just lunatic and appeal to his direct sensibilities on this and maybe a place that had fond childhood memories. So I started crafting a message to go directly to him, to Mohammed bin Salman.

[Ryan Knudson]

Andy's proposal was essentially to throw out the master plan for Neomountain. There would be no vault, no lake. Instead, they'd play up the natural beauty of what they had. The plan would be much cheaper and in Andy's view, still achieve neom's goals. He began developing his pitch in secret. And then he says, Nodmi got wind of it.

[Andy Wirth]

Word got out and he absolutely bleeding from his eyeballs screaming at you. Oh, yeah, to your face. Yeah. Which is. Which happened all the time with me. And it didn't matter to me. I made the mistake of laughing at him a couple times because it was actually funny to watch doing this kind of in his mode. But yeah, yeah, it drove him batshit crazy. And I advanced that thought because there was just no way I could get this two page document rationalizing a different approach to the mountain region. I could not get that to the Crown Prince without going through Nodmi's desk.

[Ryan Knudson]

Andy'd known from his earliest days on the job that the plans for Neo Mountain were ambitious, but he'd hoped he'd be able to change things on the ground. So you sort of thought going into it, like, okay, even the sort of crazy ideas you heard about, you thought, well, I get in there, we'll steer this in the right direction.

[Andy Wirth]

Being CEO of this region, yeah, I saw myself as with science, math, modeling, good sense and more. Some of my experiences injected into this effort, be able to change a little bit of direction, if not a little bit, change the directions of some of them, some of the elements within Neon Mountain.

[Ryan Knudson]

And you found you weren't able to do that?

[Andy Wirth]

Not at all. In fact, it was exact opposite. Shut up. Execute. Rationalize. Execute.

[Ryan Knudson]

All of this made him think about something some of his colleagues told him a couple months into the job.

[Andy Wirth]

They'd say, andy, haven't you heard? You carry two buckets over here. One's filled with gold and one's filled with horse. It's only when the horse outweighs the gold that you reconsider working here. And I was indifferent about the money, the gold. I was indifferent. But the horseshit piled up pretty quickly in my bucket.

[Ryan Knudson]

Andy left Neom in September of 2020. He just got on the plane. He didn't tell Nodmi he was quitting until he was out of the country. He lasted five months. Tony lasted a bit longer. The illicit wine might have helped.

[Tony Harris]

So, as you know, Saudi Arabia is totally dry. And so, in theory, was the camp. But we found a way of doctoring the fruit juice.

[Ryan Knudson]

How would you doctor the fruit juice? By letting it ferment or something?

[Tony Harris]

Yes. We brought in some stuff that would make it work. And by the way, they sold these. I mean, you can only laugh because they must have known what we were doing. They sold these big cardboard cartons of fruit juice in the camp store. And, you know, people would cart them away in wheelbarrows.

[Ryan Knudson]

What would you talk about over the moonshine with your friends?

[Tony Harris]

How nuts we all are. But, you know, we were there. And, you know, it's not often that you're able to walk into a car dealership and write a check with one month's salary for a brand new vehicle. That is very seductive.

[Ryan Knudson]

So it was the money that was keeping you going?

[Tony Harris]

It was certainly the money that was keeping us going towards the end. Yes, absolutely. Yes, yes.

[Ryan Knudson]

For Tony, the bucket of gold still outweighed that second bucket at Least for a time. And that wasn't just true for him. Another former NEOM employee told Elliot, people are there, quote, for the income, not the outcome.

[Tony Harris]

I mean, I think the number of people who we met who were building a second house on Ibiza or somebody was paying for a nice 40 foot Hinkley or somebody was waiting until they'd paid off their kids college tuition, I think you get the drift. You know, this was the pot of gold at the end of the rainbow, which comes along once in a blue moon and for many people it never comes along.

[Ryan Knudson]

What else other than the money was keeping you going?

[Tony Harris]

Well, I think we wanted to stick it out. We said, we've come this far, maybe it's going to get better. You know, maybe they will see the reason, maybe this is not so bad. But eventually it became too stressful and I think that's why we left. And I think that's why most people leave, just they can't take the work environment.

[Ryan Knudson]

Tony and his wife left NEOM in May 2021. They'd lasted a year.

[Tony Harris]

If I look back today, I certainly don't regret that experience. We learned a lot. We met some absolutely fabulous people. So I'm not sorry that we had that experience. I just am sorry that it was so badly led from the very top.

[Ryan Knudson]

Naadmi would last another three years at Neom. And the story of his departure starts with what should have been a major moment for the project. The grand opening of its very first development, Sindalah. That island with a cluster of resorts and parking for your yacht.

[Elliot Brown]

It was, by NEOM standards, easy to build.

[Ryan Knudson]

Reporter Elliot Brown Again, you know, in.

[Elliot Brown]

Reality it's challenging to build on an island and it was sort of innovative design, but compared to the line, you know, we're talking structures that are a few stories high. It was supposed to cost a little over a billion dollars as of a couple years ago. But as they actually got along with construction, everything just kept going up. The concrete was expensive, the steel was expensive. Everything was taking a while.

[Ryan Knudson]

Sindalah was running three years late and $3 billion over budget. The pressure was growing for Nodmi to finally deliver. And so in October, he launched Sindalah with a big glitzy party. Will Smith and Tom Brady attended. Alicia Keys performed for an audience of business executives. Super yachts floated in the water nearby. But the spectacle couldn't entirely distract from the embarrassing truth about Sandal.

[Elliot Brown]

The reality is it wasn't even done. Half of the island is still a construction site. The hotels that were theoretically done are a lot of the rooms are shut.

[Ryan Knudson]

And still more damning was who hadn't shown up for the launch. What did MBS make of this?

[Elliot Brown]

Well, he didn't go to the party.

[Ryan Knudson]

MBS had stood up Neil and nod me.

[Elliot Brown]

We don't know why but the NEOM employees were quite surprised by that. They took it as a sign of disapproval. And then three weeks later the Saudi decides to shake up neom.

[Rory Jones]

Within weeks, Naadmi leaves as the CEO.

[Ryan Knudson]

Reporter Rory Jones Again, the sort of.

[Rory Jones]

Exact details about what happened and why and whether he was pushed isn't clear. But what is clear is that there is this coming out party for NEOM that MBS doesn't turn up at. And then weeks later, the CEO of NEOM is gone.

[Ryan Knudson]

NADMI had presided over years of ballooning costs, staff churn and push deadlines. The dance of delusion had thrived on his watch. But when the time came to deliver, the music stopped and nadmi, the man who once declared that he drives people like slaves, was out. There are many stories of visionary CEOs who drive their employees incredibly hard and get miracles out of them. So why don't you think it worked for Nodmi?

[Rory Jones]

Yeah, it's a good question. I think partly it's about the juxtaposition between that sort of culture of the hard charging exec and, and the idea for neom. NEOM is supposed to be this place where people go and they're free thinking. The whole essence of NEOM is it's going to be more liberal than the rest of the kingdom and that it's going to be progressive. And a lot of the people that go there are buying into that idea and they are, they really do think of themselves as interested in creating the future. So you've got these types of people that are then coming into contact with a CEO that is more in a traditional mold that believes that he can sort of shout and belittle people and that's going to motivate them and there's just a complete culture clash there.

[Ryan Knudson]

Since naadmi's departure, Saudi Arabia's sovereign wealth fund, the pif, has taken more direct control of neom and they're finally coming to grips with the project's true cost.

[Elliot Brown]

We saw one document that was a draft presentation to the board last year that put the total capital expenditure of the full NEOM build out at $8.8 trillion.

[Ryan Knudson]

$8 trillion. I mean, I feel like I already know the answer to this question, but can Saudi Arabia afford that?

[Elliot Brown]

No. Is the long and Short, not even close.

[Ryan Knudson]

A NEOM spokeswoman said the journal was incorrectly interpreting the numbers in that presentation. As for NEOM's progress, she said, Our priorities remain intact and all five of our regions are underway. With 103 active construction sites across NEOM, in some ways, MBS in Saudi Arabia may not need NEOM anymore. Remember that when MBS first came to power, he enacted a bunch of social reforms, and Rory says they've had a huge impact.

[Rory Jones]

He opens cinemas, he allows live music, he allows men and women to intermingle. And that just creates a completely different environment in other parts of the kingdom like Jeddah and Riyadh. And so now it's like one of the coolest places to be in the Middle East.

[Ryan Knudson]

Saudi Arabia now has an entertainment sector and a tourism industry. Most importantly, it's less dependent on oil. In 2023, for the first time, 50% of Saudi Arabia's real GDP came from sources other than oil. It's sort of like as MBS was trying to build neom, this new place where anything was possible, the rest of Saudi Arabia has actually become more like neom, the place that he was dreaming of.

[Rory Jones]

Absolutely. Yeah, definitely. I think MBS has really initiated a bunch of changes in the rest of the kingdom that mean the raison d'etre for Neom, you know, isn't as strong.

[Ryan Knudson]

How would you describe neom's trajectory now? What do you think it'll become?

[Rory Jones]

Neom's not gonna go away or gonna be canned completely. MBS has tied his reputation to neom, and so it's still an important project for him. It's just like the scale and ambition of it is likely to be scaled back and look totally different than what was first laid out. And I sort of go back to that idea that MBS has constantly been sort of saying for almost 10 years. It's like, if we can just do 50% of what we set out to do, then like, will have completely changed our country.

[Ryan Knudson]

Meanwhile, construction on NEOM continues. Head over to Google Maps and click toward the northwest corner of Saudi Arabia and you'll see it. An over 60 mile long gash cutting through the desert. It's a trench marking the future path of the line. The current plan is for NEOM to finish the first mile and a half of the line in the next 10 years or so. The rest probably won't be completed for decades, if ever. Even within Neom, people worry that that 60 mile trench is a literal Money Pit, performative progress leading to nowhere. MBS once said that he wanted to build his pyramids. Only time will tell whether it's a monument to a young leader's vision or his failed ambition. Before we go, I just want to say that this will be my last Journal episode for a while. I'm going out on paternity leave through the summer, but I'll be back on the show this fall. See you then. That's all for today. Saturday, April 26 the Journal is a co production of Spotify and the Wall Street Journal. This episode was produced by Annie Minoff and edited by Kathryn Brewer. I'm Ryan Knudson. Additional reporting in this episode by Stephen Kaelin and Summer Saeed. Fact checking by Kate Gallagher. Sound design and mixing by Griffin Tanner. Music in this episode by Emma Munger, Griffin Tanner and Blue Dot Sessions. Our theme music is by so Wiley and remixed by Griffin Tanner. Special thanks to Alex Frangos, Caitlinbaugh, Laura Morris, Sarah Platt and Tatiana Zamis. Thanks for listening. See you.