Country’s price can be lower

Lukashenka affirmed the general mechanism of privatization price reduction for state property.

A new decree on state property has been signed. The decree will move the privatization processes from the dead point and create new incomes for the budget.

The main aspect of the document is the transition of the right to dispose the state property to the state governance institutions and local authorities. Presently, this right belongs solely to Lukashenka and the government, AFN reports.

In particular, the Council of ministers keeps the right to rent enterprises and to maintain enterprises’ shares.

Both to the government and state governance institutions obtain the right to decide on alienation and pledge of real estate and movable property, depending on the price.

Local powers (regional and Minsk executive committees) get the right to decide on alienation involving auction sales with a fixed initial price of one basic amount, and on free privatization of state property of the Republic of Belarus that is not used or that is used ineffectively, and is included to a corresponding list, within realization of investment projects.

Moreover, local powers can submit state property alienation proposals to the presidium of the Council of ministers. The funds obtained from the alienation will be split evenly between the national and local budgets.

Administrative responsibility is introduced in the document in order to stimulate privatization process. In particular, the failure to submit or untimely submission of information about an unused or ineffectively used property by republican and regional legal entities will lead to a fine of up to 50 basic amounts. The failure to take measures to effectively maintain a property by state institutions and organizations as well as chairpersons of regional and Minsk executive committees will lead to a fine of up 25 basic amounts.

Beside the split of responsibility, the Belarusian powers have decided to hold back on the privatization greed: the document introduces a common procedure of initial price reduction of state-owned real estate. 20% reduction follows after the first ineffective or failed trades, 50% reduction after the second, and 80% reduction after the third.

According to an official comment, ”after the fourth ineffective or failed trades the property will be auctioned at an initial sale price of one basic amount. At the same time, an obligatory condition of the auction sale with an initial price of one basic amount is that the buyer starts a business operation on these objects and that any alienation of the property until the buyer fully complies with the contract is prohibited.”

Meanwhile, according to the document, a property purchased for one basic amount can be demolished in case a new real estate object will be constructed on the site.

Moreover, in minor and medium inhabited localities and in the countryside, physical entities get the right to partake in auctions where property is sold for one basic amount.

The document introduces changes to the process of selling a property to the tenant. From now on, state property can be sold to the tenant only at a market price; gratuitous alienation without an auction or tender and a non-monetary investment in a private legal entity’s paid statutory capital are allowed.

At the same time, legal entities who have been renting a state-owned property for at least three years can purchase the property at a market price with a 5-year installment payment.

It is emphasized in the official comment, that the market price of the property should be reduced by the costs that the tenant suffered in order to improve the condition and selling qualities of the property, in case the costs have been included to the defined market price and haven’t been compensated.