Saudi Arabia announces $500 billion city of robots and renewables

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Klaus Kleinfeld will be the president of the new project.
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The wind and sun will allow NEOM to be powered solely by regenerative energy
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NEOM commands a unique location to bring together the best of Arabia, Asia, Africa, Europe and America
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NEOM is developed to be independent of the Kingdom’s existing governmental framework
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Overlooking the waterfront of the Red Sea to the South and the West, and the Gulf of Aqaba, NEOM enjoys an uninterrupted coastline stretching over 468 km
Updated 25 October 2017
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Saudi Arabia announces $500 billion city of robots and renewables

LONDON: Saudi Arabia on Tuesday announced plans to build a $500 billion mega city on the Kingdom’s Red Sea coast, as part of a huge national push to diversify its economy.
The 26,500 square kilometers zone, known as Neom, will focus on industries including energy and water, biotechnology, food, advanced manufacturing and entertainment, Saudi Crown Prince Mohammed bin Salman said yesterday.
“The focus on these sectors will stimulate economic growth and diversification by nurturing international innovation and manufacturing, to drive local industry, job creation, and GDP growth in the Kingdom,” said Prince Mohammed, who is also the Chairman of the Public Investment Fund (PIF).
“Neom will attract private as well as public investments and partnerships. The zone will be backed by more than $500 billion over the coming years by the Kingdom of Saudi Arabia, the Saudi Arabian Public Investment Fund, local as well as international investors,” he added.
The business and industrial city will be located in the Kingdom’s northwestern region and is the world’s first zone to extend across three countries, stretching its borders into neighboring Jordan and Egypt.
Adjacent to the Red Sea and the Gulf of Aqaba, and near maritime trade routes that use the Suez Canal, the zone will power itself solely with wind power and solar energy.
The city aims to offer its inhabitants “an idyllic lifestyle paired with excellent economic opportunities that surpass that of any other metropolis. It will attract Saudi Arabians and expatriates, as do all other global societies,” PIF said in a statement.

Neom is the latest project in an ambitious plan to prepare Saudi Arabia for the post-oil era, and follows of plans sell shares in oil giant Saudi Aramco, create the world’s largest sovereign wealth fund and lift the long-standing ban on female drivers.
“Neom will be constructed from the ground-up, on greenfield sites, allowing it a unique opportunity to be distinguished from all other places that have been developed and constructed over hundreds of years,” he said.
PIF said in a statement that the first phase of the city would be complete in 2025. “(Neom) seeks to seize the great economic opportunities of the future by investing in them with confidence and vigor,” the investment body said.
“Neom provides a key opportunity to minimize GDP leakage by allowing those that normally would invest outside, to give them an option of investing locally, hence minimizing the GDP exodus that happens because of limited local investment opportunities,” PIF said in a statement.
The Kingdom has established a special authority to oversee Neom.
Wes Schwalje, COO of Dubai-based research and strategy center Tahseen Consulting, said: “Neom is bringing the same level of disruption to urban planning and economic development as Uber has brought to the technology sector. Investment is strongly influenced by stability, openness, and institutional quality.
“With the announcement of Neom, the Public Investment Fund and Saudi Arabia is communicating to the world that the Kingdom is open for business.”


Lufthansa announces overhaul of budget carrier Eurowings

Updated 24 June 2019
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Lufthansa announces overhaul of budget carrier Eurowings

  • Lufthansa cited falling revenues at Eurowings as a major reason for its warning on full-year profits on June 16
  • Eurowings’ long-haul business would be managed by Lufthansa in the future

BERLIN: Lufthansa on Monday announced a turnaround plan for Eurowings in which the budget carrier will focus on short-haul flights and seek a 15 percent cut in costs by 2022 in the hope of returning to profit.
The German airline cited falling revenues at Eurowings as a major reason for its warning on full-year profits on June 16. Eurowings’ revenue was also forecast to fall sharply in the second quarter.
Lufthansa said its Eurowings fleet would be standardized on the Airbus A320 family and it would seek to boost productivity at Eurowings by limiting itself in Germany to one air operator’s certificate.
Brussels Airlines — the Belgian national flag carrier which Lufthansa took control of in 2016 — would not be integrated into Eurowings, Lufthansa said. A turnaround plan for Brussels Airlines will be announced in the third quarter.
Lufthansa also said it would start pegging its dividend payout ratio to net profit in the future to give the group more flexibility. It would pay out a regular dividend of 20 percent-40 percent of net profit, adjusted for one-off gains and losses.
Lufthansa said Eurowings’ long-haul business would be managed by Lufthansa in the future.
Carsten Spohr, Chief Executive Officer of Lufthansa, said Monday’s announcements sent “a clear signal that this company cares about its shareholders and tries to create value for them.”
Lufthansa said its Network Airlines — made up of Lufthansa, Swiss and Austrian Airlines — would aim to use innovations in sales and distribution to make a contribution to increasing unit revenues by 3 percent by 2022.
Network Airlines will aim to reduce unit costs continuously by 1 to 2 percent annually, the airline said.