AN AUCTION FOR SALE OF MILITARY PROPERTY WAS CANCELLED
by Madina Shavlokhova

WPS Agency
DEFENSE and SECURITY (Russia)
April 11, 2008 Friday

AN AUCTION FOR SALE OF PROPERTY OF THE DEFENSE MINISTRY DID NOT TAKE
PLACE BECAUSE OF ABSENCE OF BUYERS; The auction for the sale of two
objects of the Defense Ministry appointed in December of 2007 did not
take place today. Ilshat Baichurin, director of the information and
public relations department of the Defense Ministry, explained that
there were not enough candidates willing to take part in the auction.

The auction for the sale of two objects of the Defense Ministry
appointed in December of 2007 did not take place today. Ilshat
Baichurin, director of the information and public relations department
of the Defense Ministry, explained that there were not enough
candidates willing to take part in the auction.

The Defense Ministry planned to earn 4 billion rubles from the sale of
these objects and to spend this money on improving housing conditions
for servicemen.

The sale had to serve as a kind of training for the Defense Ministry
and on the basis of it experts of the ministry could carry out auctions
independently in the future.

The Defense Ministry rents or uses territories with an area of 135,820
square kilometers. The ministry also has Sary-Shagan and Emba training
ranges rented from Kazakhstan and objects in Crimea and Armenia. In
the last 15 years, the Armed Forces were reduced from 4 million to
1.1 million servicemen and hence a significant part of military camps
and training ranges became empty and many of their inhabitants lost
their relation to the army.

In 2008, the Defense Ministry planned to offer for sale about 20
objects but because of a resolution of the government of April 3
it will be necessary to change these plans urgently. Besides the
resolution, there is also another milestone about which a source in
the Defense Ministry has reported. According to the source, Defense
Minister Anatoly Serdyukov has encountered counteraction on the part
of Chair of the Russian Federal Property Fund (RFPF), Yury Petrov.

According to the law, this civilian agency is authorized to organize
these auctions. The source said, "Serdyukov and Petrov have different
views on military property." During a meeting dedicated to results
of work of the RFPF in March, Petrov cracked down on the intentions
of Serdyukov saying that there could be only one seller, namely the
RFPF, and the Defense Ministry could take part in the deals only on
the basis of an agent agreement. In turn, the military reminded the
RFPF about the New Holland Island in the center of St. Petersburg
where former barracks of the Czar’s army were located. In 2006, the
island was sold at an auction at $4,000 per square meter. According
to the military, this price was obviously undervalued.