We are taking rapid steps towards digitalization of implementation of state construction projects important to the state and more efficient management of the buildings. We also organize real estate sales in real estate transactions, and we will soon start rental e-auctions, offering rental of state property premises, mainly premises for commercial activities in Riga and elsewhere in Latvia. Until next year, we plan to gradually move to electronic rental rights auctions, leaving the experience of face-to-face auctions to history. In order to implement it, appropriate changes must be made in the legislation that determines the procedure for leasing the property of a public person.
Evaluating the two-year experience of e-auctions, it is obvious that the digitization of auctions has been the right step - we have significantly increased the public availability and efficiency of state property auctions by conducting real estate transactions in the form most accessible to the public. In the past, in person auctions were held historically, where participants submitted bids in sealed envelopes, bidding was done orally by hand-raising, and the result was announced by tapping with a hammer, as shown in old and modern films. It is clear that this requires a number of different administrative steps. Instead of in person auctions, in 2019 we gradually launched electronic auctions using the Courts administration's auction site “e- auctions ”, which has now become a constant practice for us in the field of real estate sales. This has made it possible to expand the range of potential stakeholders as much as possible. Currently, 24 state-owned properties and more than 100 rental advertisements are for sale in SRE, which will be gradually digitized. The first SRE rental offers in the form of e-auctions will be offered in June.
SRE auctions take place only in a publicly accessible form in accordance with the procedures established by the state - through a public auction - any applicant may apply. An electronic auction site is an automated system where you can place real estate publications, check a person's eligibility and confirm their participation in the auction, hold the auction itself, as well as send notifications to their participants. Participants can bid electronically at any time or place - without leaving home or being anywhere in the world. This is especially important at a time when many work and live at the same place - results can be achieved much faster, more conveniently and more efficiently. The platform provides open and accessible rules to all parties involved - both sellers and buyers, and also supervising authorities, excluding representation of any interests.
In this way, it is possible to more successfully sell state property that causes losses. For example, eliminated educational establishments in the regions that have ceased their activities, ownerless property and the property of liquidated companies, that are regularly managed by the SRE. Large, historic houses for new development ar also sold in e-auctions, which are not fit for the needs of public administration and which are inefficient for the state to maintain in the long term. Selling such buildings is always a long process, as houses require significant investment, which potential investors must carefully consider. For example, already in the first self-organized e-auction in February 2019, SRE successfully sold a 10,000 square meter plot of land in Jēkabpils, for which several in person auctions were previously held, but there was no interest in the offer. By publishing the opportunity to purchase the property remotely, it reached a significantly larger audience and the property successfully found the owners and gained the opportunity for future development. We recently successfully handed over to investors a cultural and historical building at Raiņa bulvāris 27, Riga for the development of exclusive apartments. In the course of auctions, 7 auctions have taken place since 2019, gradually reducing the starting price within the framework set by law, which is a common practice in the sale of such properties. In a competition between 3 participants, we sold a house for 2.3 million euros in the 7th auction in February this year. In order to maintain healthy competition, the auction process was extended for almost half a day, the selling price exceeding the starting price of the previous auction, thus allowing the state to earn more revenue.
At present, we transfer for alienation by e-auctions real estate and movable property managed not only by SRE, but also by other institutions (for example, the Ministry of Finance, the Ministry of Health, etc.). There are currently almost 300 active e-auctions on the e-auction site. The largest auction organizers are sworn bailiffs, state and local government institutions. All current sales and rental offers of the capital company can be found in one place on the SRE website, in the announcements section. In total in 2020 SRE sold 92 properties for approximately 3.5 million euros, including 59 buildings degrading the environment. Proceeds from the sale are used to arrange the property necessary for public needs - to create modern and sustainable offices for public institutions, which creates long-term savings in public costs and promotes the efficiency and transparency of public administration.
