Saudi Arabia’s sovereign wealth fund plans to shift management of a Red Sea tourist island away from its NEOM desert development, as Crown Prince Mohammed bin Salman’s more than $500bn mega-project undergoes a shake-up after a series of setbacks. Red Sea Global, another subsidiary of the Public Investment Fund and which has opened similar resorts, is set to take over the ultra-luxury development on Sindalah island, according to two people familiar with the matter.

The Red Sea resorts and Sindalah are part of efforts to expand tourism to diversify the Saudi economy away from its dependence on oil under the kingdom’s Vision 2030, which the crown prince launched in 2016. NEOM covers an area the size of Belgium along the Red Sea in the kingdom’s north-west, stretching up to the borders of Jordan and Egypt.

Red Sea Global led by Canadian-born executive John Pagano, is planning to open three more resorts on its Shura Island development later this month. The resorts attracted around 50,000 visitors last year — well below their initial 300,000 target, according to Pagano.

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