Saudi Arabia awards contracts to build royal palaces in futuristic megacity

Construction contracts for five palaces for Saudi Arabia's royals are among the first to be awarded in the development of a huge $500 billion megacity.

The kingdom has mandated construction companies to begin work on the futuristic business zone, named NEOM, in the northwest of the country.

The ambitious project, announced by Crown Prince Mohammed bin Salman in October last year, will establish a 26,500 square km (10,230 square mile) zone dedicated to several industries, incuding biotechnology, water, food, energy, water and entertainment.

Sources told Reuters that the royal palaces, to be located on the Red Sea coast about 150 kilometres (95 miles) west of the city of Tabuk, are among the first contracts awarded for NEOM. Saudi Binladin Group, the country's biggest construction firm, is reportedly set to build one of the palaces.

A project design document seen by Reuters showed opulent buildings with modern and traditional Moroccan-style architecture featuring Islamic designs and colourful ceramic tiles. The complex of palaces will include helipads, a marina and a golf course.

Bin Salman has previously said the ambitious city, funded by the kingdom's sovereign wealth fund, will run entirely on alternative sources of energy and feature drones, driverless cars and robots working in unison.

However critics have argued the prince's plans are unrealistic.

London-based economic research consultancy Capital Economics has warned the plans may never actualise, citing the kingdom's poor record for implementing mega-projects such as the King Abdullah Economic City.