Saudi Arabia shakes up flagship real estate project

{"text":[[{"start":6.57,"text":"Saudi Arabia has replaced the chief executive of one of Riyadh’s flagship real estate mega-projects, in the latest sign of a shake-up of the sprawling portfolio of subsidiaries owned by the country’s sovereign wealth fund."}],[{"start":19.287,"text":"Michael Dyke, a Briton who had been head of New Murabba for less than three years and was previously involved in the UK’s High Speed 2 rail project, has been replaced by Sabah Barakat."}],[{"start":30.122,"text":"A veteran of Saudi’s Public Investment Fund, Barakat has taken over as acting CEO of the more than $50bn project, which includes ambitious plans for a 400-metre by 400-metre cube structure known as the “Mukaab”."}],[{"start":44.46,"text":"The move comes after the PIF, which is chaired by Crown Prince Mohammed bin Salman, conducted a review of the more than 100 portfolio companies and projects it has launched over the past decade, many of which have suffered delays and cost overruns."}],[{"start":null,"text":"

"}],[{"start":57.877,"text":"Under pressure to deliver returns after a massive decade-long spending spree, the near $1tn sovereign fund has been reassessing its projects as it decides which should be prioritised and which should be scaled down or held back."}],[{"start":71.699,"text":"“The PIF has had a big shift in strategy. I think there’s a clear emphasis away from these large-scale speculative, infrastructure-heavy projects and a greater reliance on Saudi-based leadership and capability,” said a person familiar with the matter."}],[{"start":85.64,"text":"“There’s a general trend towards trying to reduce the expat exposure across all of the portfolio companies as there’s a contraction across the projects,” they added."}],[{"start":94.279,"text":"The sovereign fund has this year replaced foreign executives at several of its companies, including Alat, launched with a pledge to invest $100bn by 2030 in advanced manufacturing. Some of the kingdom’s grandiose development projects, including Prince Mohammed’s flagship Neom development, are also being downsized or delayed."}],[{"start":114.9,"text":"The PIF has been spearheading the crown prince’s development plans, but its priorities have shifted as it seeks to manage its vast financial commitments and prepare the kingdom for Expo 2030 and the Fifa World Cup in 2034."}],[{"start":126.915,"text":"Dyke, who was appointed in December 2023, was previously a managing director at Balfour Beatty VINCI, where he was responsible for that company’s interests in Britain’s HS2 rail project, which has been blighted by massive cost overruns and delays."}],[{"start":null,"text":""}],[{"start":143.568,"text":"Prince Mohammed announced the launch of New Murabba in February 2023, with the goal of developing “the world’s largest modern downtown” in Riyadh as part of his Vision 2030 plan to transform the kingdom."}],[{"start":158.298,"text":"Its centrepiece was supposed to be the “Mukaab”, touted as being one of the world’s largest built structures, but it has been delayed, according to the person familiar with the matter."}],[{"start":169.277,"text":"The person said the leadership changes were part of “a process of consolidation” in the PIF domestic real estate portfolio. One of the reasons for the leadership changes was that the “costs had blown out on” the Mukaab “in the order of about 100 per cent, and progress had stalled”."}],[{"start":186.184,"text":"They added that the master plan for New Murabba, which has a target of accommodating more than 280,000 people on completion in 2040, was approved by its board earlier in the year and was expected to proceed on “a staged basis”. Knight Frank estimated in 2023 that New Murabba would cost $50bn."}],[{"start":207.12,"text":"New Murabba told the FT that Barakat’s appointment had happened “in accordance with the company’s governance framework and is consistent with its long-term strategic plans. The company’s operations, partnerships and strategic direction remain firmly in place”."}],[{"start":223.01,"text":"Barakat is also listed as acting CEO of Roshn, a real estate developer that is one of the PIF’s five so-called “gigaprojects”. A British-born CEO of Roshn, David Grover, was fired in 2024."}],[{"start":237.84,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1787909759_4937.mp3"}