Turkmenistan Loses Out as Prime State Assets Privatized for Peanuts

On February 28 an auction at Turkmenistan’s Ministry of Finance and the Economy sold into private ownership 79 state assets belonging to different ministries and departments.

Bidding on some assets clearly favored certain buyers, sources told turkmen.news, as many interested businessmen were not allowed into the auction on trumped up pretexts: they had supposedly lodged their applications incorrectly. As a result, the prime assets were auctioned off for peanuts.

This applies in particular to two assets in the very center of Ashgabat, literally 10 minutes’ walk from the presidential palace – Shops No. 1 (Taj) and No. 2 (Jyga). Both buildings on Mollanepes Street, with facades of white marble, were built in 2006 by Turkish firm Polimeks and belonged to the Ministry of Energy. 

The starting price for each shop was 1.8 million manats (around $100,000 at the market rate), and each one was eventually sold for 2.5 million ($139,000).

Businessmen who could not get into the auction are scratching their heads: how could facilities with an overall area of more than 1000 sq.m in the heart of downtown Ashgabat be sold for such a low price?

“Ministry of Finance staff were determined not to accept our applications and register us as participants in the auction,” an Ashgabat businessman told turkmen.news. “One person was told there was some problem with his documentation, others that ‘you know who’ had already reserved the assets and not to go looking for trouble.”

The source told turkmen.news that there had been entrepreneurs ready to pay five million and seven million for each shop, as that is their market value.

“We have just found out that the shops have passed into the hands of people who used to rent them, while their own people made bids for each shop to create the impression of competition,” the businessman said.

For comparison, two other shops were each sold for 2.5 million manats, though they are in Abadan district, a long way from the center. They are half the size of the Taj and Jyga shops, but their starting price was around one million.

Turkmen.news’ economic commentator thinks these two shops in downtown Ashgabat should not have been put up for auction at all.

“To give away for a song assets that bring in a steady rental income is absurd,” he said. “It is usually illiquid assets that are put up for auction, loss-makers that are a burden on the state. The state has clearly suffered financial loss in this case, and businessmen can ask the prosecutor’s office to look into these deals.”

Image on front page: © Ilya Varlamov