Reports of delays and cutbacks prompt Saudi Arabia's Neom to replace its CEO.

• On Tuesday, Neom's board of directors appointed Aiman Al-Mudaifer as acting CEO of the company after the sudden departure of Nadhmi Al-Nasr, who has been leading the project since 2018.
• The hyper-futuristic cityscapes and structures in the region, as envisioned by Saudi Crown Prince Mohammed bin Salman, are set to be built, but financial pressures on the kingdom are changing.

The CEO of Saudi Arabia's Neom megaproject has been replaced in a significant reshuffling as the kingdom faces questions over the economic viability of its ambitions.

On Tuesday, Neom's board of directors appointed Aiman Al-Mudaifer as acting CEO of the company after the sudden departure of Nadhmi Al-Nasr, who has been leading the project since 2018.

The new leadership at NEOM will prioritize operational continuity, agility, and efficiency to align with the project's overall vision and objectives, as the company enters a new phase of delivery, according to a statement. No reason for Al-Nasr's departure was disclosed.

The Saudi Crown Prince's vision for the region includes futuristic cityscapes and structures such as The Line, two long skyscrapers, and Trojena, a mountain ski resort that could host the 2029 Asian Winter Games. However, these projects have faced criticism from environmentalists and engineers worldwide.

The financial pressures on the kingdom are intensifying, with subdued oil prices and demand forecasts leading to a widening budget deficit. As a result, budget cuts and project delays are becoming more common, according to three sources who spoke to CNBC on condition of anonymity.

The Line, originally planned to be 106 miles long, has been scaled back to just 1.5 miles, making it the world's longest building. However, Neom executives have denied these reports, stating that work is still continuing as planned.

The organization announced on Tuesday that progress is being made on all operations as planned, and the next phase of their portfolio of projects, including THE LINE, Oxagon, Trojena, Magna, and The Islands of NEOM, is being delivered.

The Saudi real GDP is predicted to increase by 0.8% this year, significantly lower than the initial projection of 4.4%, as stated in an October pre-budget report from the Ministry of Finance. Additionally, the authorities anticipate that the budget will continue to be in deficit in the coming years, as the kingdom prioritizes spending to achieve the objectives of the Vision 2030 economic diversification program.

The International Monetary Fund estimated that Saudi Arabia's fiscal breakeven oil price for 2024 would be $96.20 per barrel, a 19% increase from the previous year. This is 33% higher than the current price of Brent crude, which was trading at around $72 as of Wednesday afternoon.