Saudi NEOM Terminates $1B Underground Tunnel Contract for The Line

A consortium led by Samsung C&T and Hyundai Engineering & Construction, together with Greece’s Archirodon, has had its contract for a 12.5-kilometer underground tunnel in Saudi Arabia’s NEOM project terminated by the developer, NEOM Company. The work was to be carried out under NEOM’s The Line, a planned linear city in the northwestern Tabuk region.

The tunnel would have run beneath The Line to support an underground transport corridor, including a highway, a subway system, and a freight rail line. The project was awarded in June 2022 and valued at about $1 billion, with the overall construction to be completed under a single contract.

The contract was due to run through December 29, 2025. Hyundai E&C’s disclosed stake in the project was about 7,231 billion won. The termination notice was issued by NEOM Company as part of what the company described as a “reorganization of the client’s project.”

Hyundai E&C said that the portion already投入 had not produced a financial loss for the company to date, but that remaining settlement terms are being kept confidential under the contract’s nondisclosure provisions.

The decision matters beyond Korea because NEOM is one of the world’s highest-profile Saudi megaprojects, aimed at diversifying the economy through technology, energy, and advanced urban development. The involvement of multinational contractors such as Samsung C&T, Hyundai E&C, and Archirodon illustrates how large-scale, state-backed initiatives rely on international supply chains and financing.

For U.S. readers, the episode highlights dynamics that affect global infrastructure markets, including how project reorganizations or changes in scope can impact overseas contractors, cross-border risk, and the pipeline of large-scale contracts involving American suppliers and partners. It also underscores how geopolitical and economic shifts in the Middle East can influence technology and construction markets worldwide.