How is the efficiency of state property use being improved in the Vitebsk region?
— Viktor Vasilyevich, the accountability for working with vacant property, which is considered one of the reserves for increasing business activity, is increasing every year. How is this asset being utilized in the Vitebsk region?
— In total, in 2019, state administration bodies carried out work to involve more than 1 thousand objects into economic circulation, which is a third more than in 2018. For the past few years, the main way to reduce idle real estate has been sales. In 2019, the committee organized 663 auctions (3% more than in 2018), and approximately every sixth auction was successful. 106 buildings and structures were sold for almost 4.3 million, which is 48% higher than the amount earned in 2018. The number of sold objects increased by about 7%. I want to note that almost all objects sold at auctions are used in economic or other activities by the new owners.
— What objects were in the greatest demand at last year's auctions?
— Half of the properties sold at auctions were put up for sale with a starting price of one basic unit. By the way, since 2007, when Decree No. 108 came into force, about 800 buildings have been sold for 1 BU in the Vitebsk region. The owners of more than a third of them have already fulfilled the terms of the sale and purchase agreement, and another 175 properties have been or are being returned to state ownership. It is clear that along with the attractive price, the legislation provides for strict liability for non-fulfillment of the sale conditions, up to penalties in the amount of the estimated value of the real estate. In turn, this can lead to a deterioration of the financial situation of the business entity or even bankruptcy. Taking into account the objective circumstances, the committee proposes that local authorities approach such situations in a differentiated manner, extending the deadlines for fulfilling the terms of the agreement whenever possible.
The sale of communal property to tenants who have occupied the real estate for more than three years and have conscientiously fulfilled their obligations under the lease agreements also continued. 25 properties with a market value of more than 2.1 million rubles were sold in this targeted manner. By the way, this is one of the best results in the country.
— The improvement of the efficiency of real estate use in the Orsha district is under special control.
— The consolidated calendar schedule for involving property in circulation in the district includes 648 properties. As of the beginning of the year, almost 60% of them were in use, including about a third of the buildings and structures were sold, leased, or transferred to another owner, and about another 22% are used by organizations for their own purposes.
— Nevertheless, almost 85% of the auctions ended without results. In your opinion, what are the reasons for such low buyer activity?
— Indeed, over 70% of the properties put up for auction remain unclaimed. Moreover, we currently have about 60 structures for which auctions have been held since 2015, as it is not possible to involve them in circulation by other means. We are conducting a demand analysis and see that one of the reasons affecting buyer activity remains the specificity of the properties, their remoteness from large cities and district centers. As a rule, such structures are located in places where there is no infrastructure, and most importantly, no people.
This is also evident from the final statistics in the regional breakdown. Thus, 21 buildings were sold in Vitebsk, and 14 in Orsha. If we consider rural areas, then 11 structures were sold in Lepel region, and 8 in Postavy district. In Liozno and Ushachi districts, only one property each was sold, and Rossonsky and Beshenkovichsky districts had a zero result.
To stimulate demand, the committee, together with the culture department of the regional executive committee, has formed a database of historical and cultural heritage sites.
It includes over 20 buildings, manor complexes, and religious buildings, mainly from the 18th-19th centuries, from 13 regions, which will be offered to investors.
— While preparing for the interview, I noticed that unused areas have been increasing for the second year in a row, despite significant efforts. What is the reason for this?
— The share of unused real estate is about 6% (approximately 590 thousand sq. m). Its area increased in 2019 by about 10%, mainly due to the transfer of property of liquidated business entities and social facilities in rural areas to communal ownership. By the way, dealing with the property of organizations undergoing liquidation or bankruptcy proceedings has become one of the committee's focus areas. Last year alone, decisions were prepared to determine the receiving party for over 1.1 thousand real estate objects of such entities, which is 36.4% more than the previous year. In total, decisions were made regarding over 3 thousand structures.
— Viktor Vasilievich, corporate governance and owner supervision are also important areas of the committee's activities. What is being done in the Vitebsk region to improve the quality of management of business entities with the participation of the Vitebsk region and its administrative-territorial units?
— Increased attention is paid to the efficiency of the public sector. This is evidenced by the recently adopted decisions to increase the level of representation in the governing bodies of business entities. Thus, in strategically important Open Joint-Stock Companies (OJSCs) operating in the Vitebsk region, state representatives are among the top officials of the country.
Today, the Vitebsk region owns shares in the authorized capital of 65 OJSCs, in which owner supervision is carried out by 9 state administration bodies and state associations. Another 130 OJSCs have shares of cities and districts of the Vitebsk region. In terms of industry structure, more than 70% of them are organizations of the agro-industrial complex and processing industry.
Among the priority areas for improving the quality of public sector management are ensuring effective owner supervision, including through strengthening the personnel of state representatives, and implementing elements of corporate governance, which is given priority.
Elements of corporate governance are in place in 19 OJSCs with communal property shares, or almost one in ten companies. Joint-stock companies are most actively implementing a corporate code, which is a set of rules for the interaction of the company, its shareholders, management and control bodies, both among themselves and with state and other organizations. It has been adopted by 10 OJSCs, including all joint-stock companies where owner supervision is carried out by the main department of trade and services of the Vitebsk Regional Executive Committee, as well as at Verkhnedvinsk Dairy and Canning Plant, Agrokombinat Yubileiny, Mir Usług Plus OJSC, Vitebsklift, ATP No. 4, Vitebsk.
JSC No. 9 operates under a different corporate governance model. It consists of local normative legal acts (regulations on the supervisory board, directorate, audit committee, dividend policy, etc.). Such a management mechanism involves expanding the powers of each management or control body of the joint-stock company. It should be borne in mind that corporate governance models are constantly being improved, so Vitebskoblimushchestvo provides consulting assistance to companies. In addition, the committee is currently selecting candidates for election as independent directors to the supervisory boards of JSCs with communal ownership. The register already includes the candidacies of six individuals based on pre-defined conditions and requirements for such managers. They will be able to assist companies in implementing corporate governance elements, particularly in developing their development strategies.
The total area of facilities owned by the Vitebsk region and its administrative-territorial units exceeds 9.9 million sq. m, including over 300 thousand sq. m leased out and almost 913 thousand sq. m transferred for gratuitous use.