| World news Saudi Arabia NEOM scraps Trojena dam contract in broader project overhaul
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 1m m3 of roller compacted concrete placed – about 25% of the total RCC required.
India
India clears $310m small hydro scheme targeting 1.5GW by 2031 India’s Union Cabinet, chaired by Prime Minister Narendra Modi, has approved a new Small Hydro Power (SHP) Development Scheme for FY2026-27 to FY2030-31, allocating INR 2,584.6 crore (about $310m) to support 1.5 GW of new capacity. The scheme targets projects between 1MW and 25MW and is expected to prioritise deployment in hilly and north-eastern states, where untapped small hydropower potential remains significant. Under the programme, central financial assistance will be higher for projects in north- eastern states and districts along international borders, set at INR 3.6 crore per MW (about $430,000/MW) or 30% of project cost, capped at INR 30 crore per project (about $3.2m). For other states, support is set at INR 2.4
crore per MW (about $290,000/MW) or 20% of project cost, with a cap of INR 20 crore per project (about $2.1m). The government has earmarked INR 2,532
crore (about $305m) for project support and expects the scheme to mobilise around INR 15,000 crore (about $1.6bn) in total investment. All plant and machinery is expected to be sourced domestically. An additional INR 30 crore (about $3.2m) will fund the preparation of detailed project reports (DPRs) for around 200 future projects, aimed at building a development pipeline.
The scheme is projected to generate
approximately 5.1 million person-days of employment during construction, with further jobs in operations and maintenance. As decentralised projects, small hydro installations are expected to require limited transmission infrastructure and reduce losses. The government said the programme
is intended to accelerate development of small hydropower, particularly in remote areas, while limiting environmental impacts compared with large hydro projects.
Norway Veidekke to build Øygard hydropower plant for Å Energi Å Energi Vannkraft has awarded Norwegian contractor Veidekke a contract worth nearly NOK580m (US$60m) to construct the Øygard hydropower plant in Åseral municipality in Agder, southern Norway. The project is the final stage of a series of seven hydropower developments undertaken by Å Energi in the area over the past decade. Construction work was scheduled to begin at the end of April, with completion planned for summer 2029. Øygard hydropower plant will have an installed capacity of 21MW and is expected to produce about 80GWh annually. Once completed, Å Energi’s total annual production in Åseral will reach around 1,400GWh, equivalent to roughly 4% of annual electricity consumption in southern Norway’s NO2 price area.
Veidekke said the contract covers construction of a power station at Nåvatn, along with a 6.6km transfer tunnel and 1.3km of auxiliary tunnels including access tunnels, an inlet tunnel, bypass tunnel and swing arrangement. The works also include sand traps, pressure pipes, shafts, gates and other hydraulic structures, as well as preparation of the site for a 132 kV outdoor switchyard at the power station. Neal Nordahl, director at Veidekke Anlegg, said the company welcomed the opportunity to take part in the final stage of the development programme. “Veidekke has a long and proud history when it comes to building hydroelectric power plants that produce in-demand renewable energy. We are therefore very pleased to have won the competition for the final stage of the power development in Åseral,” he said. Å Energi described the project as a milestone that will complete a major hydropower expansion programme in Åseral that began in 2016 and represents more than NOK 3.5 billion (about US$360 million) in total investment. Steffen Syvertsen, CEO of Å Energi, said:
“This is a milestone for us. I am pleased that we can now finally start construction of Øygard power plant and thus complete the development in Åseral that we started almost ten years ago.” The broader programme has included the
installation of a new 100MW unit at Skjerka power plant, construction of a new dam at
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