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Oct. 2005

BVVG - Bodenverwertungs- und -verwaltungs GmbH. Oct. 2005. BVVG. Realignment of Land. Historical Background. Land reform 1945-1949 Collectivisation after 1949 Privatisation after reunification. Total Area: 13,4 Mio parcels. Total Area: 10,8 Mio ha.

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Oct. 2005

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  1. BVVG - Bodenverwertungs- und -verwaltungs GmbH Oct. 2005

  2. BVVG Realignment of Land

  3. Historical Background • Land reform 1945-1949 • Collectivisation after 1949 • Privatisation after reunification Oct. 2005

  4. Total Area: 13,4 Mio parcels Total Area: 10,8 Mio ha Property of church: 0,15 Mio parcels Property of church: 0,2 Mio ha Privately owned land 5,1 Mio ha Publicly owned land 4,5 Mio parcels Publicly owned land 5,5 Mio ha Privately owned land 8,7 Mio parcels Starting Position Oct. 2005

  5. Privatization of Agricultural and Forestry Land Oct. 2005

  6. Situation in the Agricultural Sector in 1989 • 4.500 Collective Farms • 515 State Farms • 2,2 Mio ha of agricultural land in state ownership (35%) • 2,0 Mio ha of forestry land (90%) in state ownership Oct. 2005

  7. Turning publicly owned land into private property • Foundation of the German Trust Agency (Treuhandanstalt) January 1990 • Objective: Privatization of state owned property • Foundation of BVVG - July 1992 • Goal 1: Privatization of state owned agricultural and forestry land • Goal 2: Restitution • Supervision of BVVG through Ministry of Finance • in cooperation with the Ministry of Consumer protection, Food and Agriculture Oct. 2005

  8. Basic Concept of the BVVG • Uniform Privatisation in all New Federal States of Germany • Independent Privatisation - as a limited company - comparatively minor influence of day to day politics • Transparent Privatisation and Administration - Approaches and Results publicly available • Turnover-oriented Privatisation - surpluses of revenues are being transferred directly to the Ministry of Finance • Socially responsible for a balanced development of the rural areas in co-operation with the agrarian administrations and elected bodies Oct. 2005

  9. The BVVG: • An Organization of the Federal Republic of Germany • Sole shareholder is the Ministry of Finance (BMF) • is supervised by the Ministry of Finance in cooperation with the Ministry of Consumer protection, Food and Agriculture (and Forestry) • Fulfills a legal mandate • Privatization and Restitution of formerly publicly owned agricultural and forestry land Oct. 2005

  10. BVVG - Service provider for the Ministry of Finance Revenues from sale and lease Administrative costs of BVVG and minimun profit Federal Ministry of Finance Costs for parcels(dues, pay out, redevelopment) Oct. 2005

  11. NL NL NL NL NL NL NL NL 8 Structure of BVVG Berlin: Head office Management central services 231 employees Branches Operational Level 717 Employees clients Oct. 2005

  12. Our Core Competencies.... • Transformation of ownership relations in rural areas by ... • Sale of agricultural and forestry land as well as land for housing area and industry • lease of agricultural land, of fishery and hunting rights • Management of abridgment of buildings and redevelopment of contaminated sites • Realization of restitution and handing back land to municipalities Oct. 2005

  13. Competency through management of… • > 1.700.000 ha Arable/pasture/forestry • 515 State farms • 4,6 Mio parcels • 30.000 active purchase applications • 75.000 sales contracts • 400.000 client data Oct. 2005

  14. III. Phase Sale at Market Value II. Phase Subsidised Sale Law of compensation I. Phase Short/Long Term Lease The Road towards Privatisation in East Germany • Stabilisation of emerging farms • Basis for future sales • 1992 - 1996 • Consolidation of the newly developed agrarian structure • Development of forestry structure in private hands • 1996 - 2010 • Sale of land within the fully developed land market • beginning 2005 Oct. 2005

  15. BVVGBodenverwertungs- und -verwaltungs GmbH The Privatization process Basis and Mechanisms for Internal and External Supervision, Control and Monitoring

  16. Control and Supervision of the Privatisation Process is realised on the following Levels Legal Regulations Supervising through Shareholder Internal Regulations Ebenen Oct. 2005

  17. Gesetzliche Regelungen BVVG as capital company underlies the regulations of the commercial code and other corresponding Laws • clear rules for the built up of the accounting system • controlling of the estate, finance and results through accounting firm • Obligation to publish annual balance sheet • Transparency Oct. 2005

  18. Steuerung und Kontrolledurch den Gesellschafter bzw. den Bund • responsible Ministry (Shareholder)Budget, goal-agreements, monthly meetings, clear distribution of competencies • Parliament / German Federal Court of Auditors hearings, Petitions via responsible Ministries, finance control • Clients initiate revision through complaints, law suits • Interest groups and associationsinquiries, which get checked byresponsible governmental bodies Oct. 2005

  19. Interne Mechanismen • Clear supervision Guidelines, support • Four eyes principle Sales and lease procedure has to be checked by second employee • Rotation of staff change of assignments, Dept., clients • Technical guidance and control through Departments at headquarters Formulation of binding Privatization rules Oct. 2005

  20. InterneMechanismen • Auditing and Reporting periodical analysis and reporting to management of organizational units, managing directors, Supervisory board and shareholder • Checking Contracts acceding a certain price volume or ha volume affirmation of managing director and responsible department necessary • Internal Revision independent board for control of internal regulations and cross checking of single cases Oct. 2005

  21. Relevance of the East German Experience for other Eastern European and Central Asian Countries • Ownership structure and Agricultural structure in the starting situation are similar • The transformation process should be oriented at the European norms´. Transformation differs from country to country but: the problems that need to be solved are comparable ! • The privatisation process has not ended yet • A sound land policy and a consistent legal frame are necessary for a successful privatisation process Oct. 2005

  22. Contribution of BVVG ... • Consulting in Land reform issues • Accompanying the privatization process for agricultural and forestry land • Development of the land market through laws, regulations valuation schemes • Forming and optimizing the state land management Oct. 2005

  23. Balance of BVVG 1992 - 2004 • sold • 297.000 ha agricultural land • 434.000 ha forstry land • 42.000 ha building land • leased out • 706.000 ha agricultural land • transferred to Federal states without charge: 30.000 ha • Restituted 1.400.000 ha • transferred to the federal budget • ca. 2,3 Milliarden Euro Oct. 2005

  24. Thank you for your attention Oct. 2005

  25. For further Contact: BVVG German Agriforest Privatization Agency Michael Rebholz BVVG Personal Assistent of CEO of BVVG Schönhauser Allee 120 D-10437 Berlin fon: +49-(0)30-4432-1007 fax: +49-(0)30-4432-1200 mail: rebholz.michael@bvvg.de Homepage of BVVG: http:// www.bvvg.de Oct. 2005

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