Italian contractor Webuild has confirmed that its contract for major water infrastructure works at Trojena has been terminated by the client, Saudi Arabia’s NEOM, marking a significant shift in the delivery of the flagship mountain development.
In a statement issued on March 25, Webuild said NEOM had exercised a “termination for convenience” clause covering the construction of a system of three dams designed to feed a freshwater lake, together with the associated architectural structure known as The Bow. The termination will take effect on March 29, 2026, with works approximately 30% complete and a remaining backlog of around €2.8bn.
The contract, originally awarded as part of a multi-billion-dollar package – reported at between $4.7 billion and $5 billion – formed a central element of Trojena’s water infrastructure, enabling the creation of a 2.8km-long artificial freshwater lake in a high-altitude desert environment.
Webuild said all costs incurred up to termination, along with those associated with demobilisation and site disengagement, will be reimbursed by the client in line with contractual provisions, leaving the group financially unaffected.
The cancellation is not an isolated case. NEOM has terminated a number of contracts across Trojena and other parts of the wider development in recent weeks, including a structural steel package for the Trojena ski village and tunnelling works linked to its flagship linear city project, The Line. Webuild also noted that similar termination actions have been taken with other contractors working within the Trojena area.
Trojena forms part of the wider NEOM development, launched in 2017 as a cornerstone of Saudi Arabia’s Vision 2030 Saudi Arabia. The mountain destination, announced in 2022, is planned to include year-round tourism infrastructure, winter sports facilities and high-end residential developments, centred around a man-made lake supported by dam infrastructure.
The dam system represented one of the most technically complex hydraulic components within NEOM, combining water storage, regulation and environmental control functions in a region with no natural freshwater resources. The works also required integration with major architectural elements and construction in mountainous terrain at elevations of up to 2,600 metres.
The recent cancellations come amid a broader reassessment of NEOM’s scope and delivery priorities. Saudi authorities have been reviewing spending on giga-projects since 2024, citing rising costs, execution challenges and shifting funding priorities, with capital increasingly redirected towards other national programmes.
Webuild said its overall construction backlog, excluding residual Trojena activities, remains in excess of €50bn.
Back in December, workers on the project had celebrated the milestone of passing 1 million m³ of roller compacted concrete placed – about 25% of the total RCC required.
