Saudi Arabia and Egypt have reportedly set up a joint fund worth more than $10 billion to develop a megacity and business zone planned to be built by Riyadh on more than 1,000 square kilometers of land in the southern Sinai Peninsula.
According to Press TV, the deal was reached late Sunday during a visit to Cairo by Saudi Crown Prince Mohammed bin Salman, an unnamed Saudi official told Reuters.
At an international conference last October, bin Salman unveiled plans to build a new city and business zone, known as Neom, which officials say will be backed up by more than $500 billion in investment.
The so-called city of the future is conceived to span an area of 26,500 square kilometers, stretching across the borders of northwest Saudi Arabia into Jordan and Egypt.
According to the Saudi official, Riyadh plans to build seven cities and tourism projects, while Egypt will focus on developing the existing resort cities of Sharm el-Sheikh and Hurghada.
Adjacent to the Red Sea and the Gulf of Aqaba close to maritime trade routes that use the Suez Canal, Neom is said to be focusing on industries such as energy and water, biotechnology, food, advanced manufacturing and tourism.
Riyadh will also work with Egypt and Jordan to attract European cruise companies to operate in the Red Sea during the winter season.
The kingdom is negotiating with seven cruise companies and aims to build yacht marinas.
The Saudi government has already asked local construction companies to build five palaces for members of the royal family in the huge business zone.
Some companies, including Japan’s Softbank, have expressed their preparedness to invest in Neom, but major, concrete business investments have not yet been announced.
Critics say the project is wasteful and ineffective in addressing the problems of the Saudi economy, including unemployment and dependence on oil.
The joint Riyadh-Cairo fund came a day after Egypt’s top court dismissed all outstanding legal challenges to a controversial deal, according to which Cairo cedes the sovereignty of two of its Red Sea islands to Saudi Arabia.