Neom terminates structural steel contract for Trojena ski village

• Contractor blames ‘geopolitical situation’
• Eversendai won project in March 2024
• Follows Winter Games cancellation

Neom has served a termination notice to Eversendai Corporation Berhad for the structural steel contract at Trojena ski village.

It is the second cancellation by the Saudi giga-project developer this month. Two weeks ago Neom cancelled a tunnelling contract worth roughly $1 billion at the heart of its flagship development The Line.

Trojena had been due to stage the Asian Winter Games in 2029, but Saudi Arabia pulled out of hosting in January.

Eversendai, a Malaysian structural steel specialist listed in Kuala Lumpur, said in a stock exchange statement that the contract termination would take effect on March 26.

The contract had been awarded in March 2024 and was being executed in collaboration with Saudi Arabia’s Al Bawani Company. The contract value was not given.

“We believe this has happened due to the current geopolitical situation in the Middle East,” its statement said.

Eversendai had fully delivered the project as per the contractual obligations with no compromise to safety and quality until the date of the notice, it added.

The contractor is now preparing documents to show project progress including commercial claims for termination and demobilisation costs, which it says should be met by Neom. 

“Operations in the Middle East remain stable despite the current geopolitical situation,” the company said, without giving further details of its project pipeline.

In its 2024 annual report, Eversendai called Trojena its “largest and most challenging project”. It completed the structural steelwork for Sindalah Island Cluster 1 and the steel erection for Qiddiya water park in 2024.

In Qatar, the company is working on the expansion of Hamad International Airport.

Eversendai’s order book stands at $510 million, excluding the balance works for Trojena. Its tender book is $4.6 billion.

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Riyadh has been reviewing giga-project spending since 2024, after years of heavy spending ran into rising costs, execution hurdles and lower crude prices – exposing international contractors to cancellations. 

The Iran-Israel war has compounded that pressure, disrupting shipping in the Strait of Hormuz and constraining crude exports from Saudi Arabia, even as Brent surged towards $120 a barrel before easing to around $100. 

Neom, the $500 billion futuristic desert city, backed by the $1 trillion Public Investment Fund, is the centrepiece of Crown Prince Mohammed bin Salman’s Vision 2030 plan to diversify the economy away from oil and attract foreign direct investment.