Oct. 2005 BVVG - Bodenverwertungs- und -verwaltungs GmbH

Oct. 2005Oct. 2005

BVVG - BVVG - Bodenverwertungs- und Bodenverwertungs- und -verwaltungs GmbH -verwaltungs GmbH

BVVGBVVG

Realignment of LandRealignment of Land

Oct. 2005 3BVVG Bodenverwertungs-Bodenverwertungs-und -verwaltungs GmbHund -verwaltungs GmbH

Historical BackgroundHistorical Background

Land reform 1945-1949Land reform 1945-1949

Collectivisation after 1949Collectivisation after 1949

Privatisation after reunification Privatisation after reunification


Starting Position

Property of church: 0,2 Mio ha

Total Area: 10,8 Mio ha

Privately owned land 5,1 Mio ha

Publicly owned land 5,5 Mio ha

Total Area: 13,4 Mio parcels

Property of church: 0,15 Mio parcels

Publicly owned land 4,5 Mio parcels

Privately owned land8,7 Mio parcels


Privatization of Agricultural and Privatization of Agricultural and Forestry LandForestry Land


Situation in the Agricultural SectorSituation in the Agricultural Sector in 1989 in 1989

4.500 Collective Farms 4.500 Collective Farms

515 State Farms515 State Farms

2,2 Mio ha of agricultural land in state ownership (35%) 2,2 Mio ha of agricultural land in state ownership (35%)

2,0 Mio ha of forestry land (90%) in state ownership2,0 Mio ha of forestry land (90%) in state ownership


Turning publicly owned land into private Turning publicly owned land into private propertyproperty

Foundation of the German Trust Agency (Treuhandanstalt) January Foundation of the German Trust Agency (Treuhandanstalt) January 19901990

Objective: Privatization of state owned propertyObjective: Privatization of state owned property

Foundation of BVVG - July 1992Foundation of BVVG - July 1992

Goal 1: Privatization of state owned agricultural and forestry landGoal 1: Privatization of state owned agricultural and forestry land

Goal 2: RestitutionGoal 2: Restitution

Supervision of BVVG through Ministry of Finance Supervision of BVVG through Ministry of Finance

in cooperation with the Ministry of Consumer protection, Food and Agriculturein cooperation with the Ministry of Consumer protection, Food and Agriculture


Basic Concept of the BVVGBasic Concept of the BVVG

UniformUniform Privatisation in all New Federal States of Germany Privatisation in all New Federal States of Germany

IndependentIndependent Privatisation - as a limited company - Privatisation - as a limited company - comparatively minor influence of day to day politics comparatively minor influence of day to day politics

TransparentTransparent Privatisation and Administration - Approaches Privatisation and Administration - Approaches and Results publicly availableand Results publicly available

Turnover-orientedTurnover-oriented Privatisation - surpluses of revenues are Privatisation - surpluses of revenues are being transferred directly to the Ministry of Finance being transferred directly to the Ministry of Finance

Socially responsibleSocially responsible for a balanced development of the rural for a balanced development of the rural areas in co-operation with the agrarian administrations and areas in co-operation with the agrarian administrations and elected bodieselected bodies


The BVVG:The BVVG:

An Organization of the Federal Republic of GermanyAn Organization of the Federal Republic of Germany Sole shareholder is the Ministry of Finance (BMF)Sole shareholder is the Ministry of Finance (BMF) is supervised by the Ministry of Finance in cooperation with is supervised by the Ministry of Finance in cooperation with

the Ministry of Consumer protection, Food and Agriculture the Ministry of Consumer protection, Food and Agriculture (and Forestry)(and Forestry)

Fulfills a legal mandateFulfills a legal mandate Privatization and Restitution of formerly publicly owned Privatization and Restitution of formerly publicly owned

agricultural and forestry landagricultural and forestry land


BVVG - Service provider for the Ministry of BVVG - Service provider for the Ministry of FinanceFinance

Revenues from sale and lease

Administrative costs of BVVG and minimun profit

Federal Ministry of Finance

Costs for parcels(dues, pay out, redevelopment)


Structure of BVVGStructure of BVVG

NLNL NLNL NLNL

NLNL NLNL NLNL NLNL

NL 8NL 8

ManagementManagement

central servicescentral servicesBerlin: Head officeBerlin: Head office

231 employees231 employees

717 Employees717 Employees

Operational Level

clientsclients

BranchesBranches


Our Core Competencies....Our Core Competencies....

Transformation of ownership relations in rural Transformation of ownership relations in rural areas by ...areas by ...

Sale of agricultural and forestry land as well as land for housing Sale of agricultural and forestry land as well as land for housing area and industryarea and industry

lease of agricultural land, of fishery and hunting rightslease of agricultural land, of fishery and hunting rights

Management of abridgment of buildings and redevelopment of Management of abridgment of buildings and redevelopment of contaminated sitescontaminated sites

Realization of restitution and handing back land to Realization of restitution and handing back land to municipalities municipalities


Competency through management of…Competency through management of…

> 1.700.000 ha Arable/pasture/forestry> 1.700.000 ha Arable/pasture/forestry

515 State farms515 State farms

4,6 Mio parcels4,6 Mio parcels

30.000 active purchase applications30.000 active purchase applications

75.000 sales contracts75.000 sales contracts

400.000 client data400.000 client data


The Road towards Privatisation in The Road towards Privatisation in East GermanyEast Germany

I. PhaseI. PhaseShort/Long Term Short/Long Term

LeaseLease

II. PhaseII. PhaseSubsidised Sale Subsidised Sale

Law of compensationLaw of compensation

III. PhaseIII. PhaseSale at Sale at

Market ValueMarket Value

Stabilisation of Stabilisation of emerging farmsemerging farms

Basis for future Basis for future sales sales

1992 - 19961992 - 1996

Consolidation of Consolidation of the newly the newly developed agrarian developed agrarian structurestructure

Development of Development of forestry structure forestry structure in private handsin private hands

1996 - 20101996 - 2010

Sale of land within Sale of land within the fully developed the fully developed land marketland market

beginning 2005beginning 2005

BVVGBVVGBodenverwertungs- und -verwaltungs GmbHBodenverwertungs- und -verwaltungs GmbH

The Privatization processThe Privatization process

Basis and Mechanisms for Internal and External Supervision, Basis and Mechanisms for Internal and External Supervision, Control and MonitoringControl and Monitoring


Control and Supervision of the Privatisation Control and Supervision of the Privatisation Process is realised on the following LevelsProcess is realised on the following Levels

Legal RegulationsLegal Regulations Supervising through Shareholder Supervising through Shareholder Internal RegulationsInternal Regulations

Ebenen


BVVG as capital company underlies BVVG as capital company underlies the regulations of the commercial code and the regulations of the commercial code and

other corresponding Lawsother corresponding Laws

clear rules for the built up of the accounting systemclear rules for the built up of the accounting system

controlling of the estate, finance and results through controlling of the estate, finance and results through accounting firmaccounting firm

Obligation to publish annual balance sheetObligation to publish annual balance sheet

TransparencyTransparency

Gesetzliche Regelungen


Steuerung und Kontrolle durch den Gesellschafter bzw. den Bund

responsible Ministryresponsible Ministry (Shareholder) (Shareholder) Budget, goal-agreements, monthly meetings, clear distribution of Budget, goal-agreements, monthly meetings, clear distribution of competencies competencies

Parliament / German Federal Court of Auditors Parliament / German Federal Court of Auditors hearings, Petitions via responsible Ministries, finance controlhearings, Petitions via responsible Ministries, finance control

ClientsClients initiate revision through complaints, law suitsinitiate revision through complaints, law suits

Interest groups and associationsInterest groups and associationsinquiriesinquiries, , which get checked bywhich get checked by responsible governmental bodiesresponsible governmental bodies


Clear supervisionClear supervision GuidelinesGuidelines, support, support

Four eyes principle Four eyes principle Sales and lease procedure has to be checked by second employeeSales and lease procedure has to be checked by second employee

Rotation of staffRotation of staffchange of assignments, Dept., clientschange of assignments, Dept., clients

Technical guidance and control through Departments at Technical guidance and control through Departments at headquartersheadquarters

Formulation of binding Privatization rulesFormulation of binding Privatization rules

Interne MechanismenInterne Mechanismen


Auditing and ReportingAuditing and Reporting periodical analysis and reporting to management of periodical analysis and reporting to management of

organizationalorganizational units, managing directors, Supervisory board and units, managing directors, Supervisory board and shareholdershareholder

Checking Contracts acceding a certain price volume or ha Checking Contracts acceding a certain price volume or ha volumevolume

affirmation of managing director and responsible department affirmation of managing director and responsible department necessarynecessary

Internal RevisionInternal Revision independent board for control of internal regulations and cross independent board for control of internal regulations and cross

checking of single caseschecking of single cases

InterneInterne MechanismenMechanismen


Relevance of the East German Relevance of the East German Experience for other Eastern European Experience for other Eastern European and Central Asian Countriesand Central Asian Countries

Ownership structure and Agricultural structure in the starting Ownership structure and Agricultural structure in the starting situation are similar situation are similar

The transformation process should be oriented at the European The transformation process should be oriented at the European norms´. Transformation differs from country to countrynorms´. Transformation differs from country to country

but:but:

the problems that need to be solved are comparable !the problems that need to be solved are comparable !

The privatisation process has not ended yetThe privatisation process has not ended yet

A sound land policy and a consistent legal frame are necessary A sound land policy and a consistent legal frame are necessary for a successful privatisation processfor a successful privatisation process


Contribution of BVVG ...Contribution of BVVG ...

Consulting in Land reform issuesConsulting in Land reform issues

Accompanying the privatization process for agricultural and Accompanying the privatization process for agricultural and forestry land forestry land

Development of the land market through laws, regulations Development of the land market through laws, regulations valuation schemesvaluation schemes

Forming and optimizing the state land managementForming and optimizing the state land management


Balance of BVVG 1992 - 2004Balance of BVVG 1992 - 2004 soldsold

297.000 ha agricultural land 297.000 ha agricultural land 434.000 ha forstry land434.000 ha forstry land 42.000 ha building land42.000 ha building land

leased outleased out 706.000 ha agricultural land 706.000 ha agricultural land

transferred to Federal states without charge: 30.000 hatransferred to Federal states without charge: 30.000 ha

Restituted 1.400.000 haRestituted 1.400.000 ha

transferred to the federal budgettransferred to the federal budget ca. 2,3 Milliarden Euroca. 2,3 Milliarden Euro


Thank you for your attentionThank you for your attention


Homepage of BVVG: http:// www.bvvg.de

Michael RebholzBVVG

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: [email protected]

For further Contact:For further Contact:BVVG German Agriforest Privatization AgencyBVVG German Agriforest Privatization Agency

Documents

Oct. 2005 BVVG - Bodenverwertungs- und -verwaltungs GmbH