Economy Ministry: Plans to Divest Hit a Snag

EghtesadOnline: Government organizations refuse to abide by budgetary laws that call for relinquishing more than 60 trillion rials ($210 million) in assets, an official with the Economy Ministry said.

News ID: ۷۵۱۲۱۰

07 October 2020

Despite the chronic budget deficits, many administrative bodies have so far not contributed to the revenue projected in the March 2020-21 fiscal budget via property divestment, Fatemeh Dadgar, director of the ministry’s department for securities and government properties said.

Almost 1,000 estates owned by the government are on the divestiture list for this year and worth an estimated 66 trillion rials, Fars News Agency reported.

“While the Economy Ministry has issued permits for sale of the properties government bodies have failed comply,” Dadgar said.

She linked the aversion to sell the properties to provisions in the annual budget that “is not encouraging enough”.

As per the budget law, earnings from divestment of government property must be allocated to fund national development projects. This is while, administrative bodies want a share of the earnings.

Property on the government divestment list are said to be unusable. “For all practical purposes the properties are not needed and have been mostly abandoned for years,” Dadgar said earlier.

The properties are scattered across the country and provincial taskforces have been set up to address issues related to the divestiture.

“They will look into any potential legal issue… and certify the particular asset is not needed and cannot be put to productive use.”

The government expects to earn 400 trillion rials ($1.4 billion) this year from selling assets, including real estate and shares in listed companies.

Experts, however, are skeptical about such projections saying it is unrealistic at best. The amount is ten times higher than the earnings last year from similar divestitures.

As per a report by the Iranian Privatization Organization, the government divested shares worth 272 trillion rials ($940m) in 16 state-owned companies through the stock market in one year ending August 2019.

The IPO said the divested amount was 16% of government stakes soled since IPO’s inception in 2001.