Saudi Arabia has terminated two major construction contracts for its Trojena ski resort, part of the $500bn Neom mega-project. Italy's Webuild Group lost its $4.7bn contract to build three dams for a freshwater lake, while Malaysia's Eversendai Corporation saw its steel supply agreement canceled. The cancellations come amid escalating regional tensions following the US-Israeli attack on Iran in late February.

The terminations reflect broader cutbacks to Neom, which Saudi Arabia had already begun scaling back this year due to design challenges, schedule delays, and budget overruns. The lake was meant to anchor Trojena, which was scheduled to host the 2029 Asian Winter Games before being postponed to Kazakhstan. Neom, chaired by Crown Prince Mohammed bin Salman, represents the kingdom's ambitious plan to reduce oil dependency through tourism and investment.

The Public Investment Fund, owner of Neom and valued at nearly $1tn, faces growing pressure to deliver returns as Riyadh recalibrates spending priorities amid declining oil revenues. The escalating conflict threatens Saudi Arabia's economic transformation goals. Webuild reported that work on Trojena was 30% complete, with Neom agreeing to reimburse accrued costs, while Eversendai cited the "current geopolitical situation" as the reason for termination.