According to a document obtained by MEDIAFAX, The government will allow RA-APPS to award public works leasing contracts and public services contracts required for the exploitation of property under its management.
The leasing contract entails the conclusion of a convention between the Romanian state and the lessee whereby the latter may exploit state property for maximum 49 years in exchange for a fee.
Award procedures will require approval from the Government’s General Secretariat and half the money obtained from such leasing contracts will go to the state budget, while should be used by RA-APPS for investments and upgrade works on the properties it has under management.
Real estate analysts have repeatedly warned the sale of RA-APPS assets under current market conditions is not the best way to go and suggested instead the state should set up a real estate fund that would be listed it on the stock market or should transfer the service to private real estate firms rather than sell the properties separately, securing greater transparency and higher gains for the state.
Over the past two years, however, RA-APPS ignored such warnings and continued setting up auctions, ending up with a deficit following repeated downgrades of estimates revenues as the auctions failed to attract buyers.
RA-APPS, which employs over 2,170 people with monthly average salaries exceeding RON1,900, is in charge of around 650 government residences and offices, more than 75 villas and over 250 hectares of land, inherited from the former state apparatus of the Communist Party and now occupied by current or former dignitaries, or even their relatives.
According to official sources, the assets managed by RA-APPS are worth EUR0.5 billion – 1 billion.