Maslukov supported suggestion of the Defense Ministry about implementation of the new scheme of sale of released military property

On November 24 the meeting of the governmental commission for operational issues was conducted under leadership of Senior Vice Premier Yury Maslukov, during which the problems of the sale of the military property, released during the process of the Armed Forces reforming.

After the meeting Maslukov reported: “The work on sale of released military property is being done very bad. Not s single of the interested ministries: State Property Ministry, Finance Ministry and Economics Ministry had serious attitude towards this issue.” Maslukov added that because of this it was decided to form a special commission, which would discuss this problem and decide how this work would be done in the future. Within two weeks the government will return to discussion of this issue.

One of the main participants of the meeting, colonel general Alexander Kosovan, Deputy Defense Minister for the construction and the troops housing, gave an exclusive interview to the observer of WPS agency.

Question: What caused the necessity to discuss the problems of the released military property sale on such a high level?

Kosovan: Within the last 18 months almost no released property of the Armed Forces was sold, despite that as a result of the Armed Forces reduction 2,552 objects of the real estate were released with residual value of some 6.6 billion rubles. Only a few objects were sold. In 1992-1997 we sold military property worth the sum, which allowed the Defense Ministry to purchase 10.200 apartments for the officers and warrant officers, and within the last 18 months we did not receive any apartments from the sale of released military property.

Defense Minister Igor Sergeev had reported about this situation to Victor Chernomyrdin and Sergei Kirienko, but in vain. Anyway, the time has come, and we were finally heard.

Question: Who is to blame for the fact that the released military property was not sold?

Answer: During the meeting of the commission the culprit was named, that is, the State Property Ministry. In August of 1997 presidential decree No. 775 “On changing of the procedure of sale of the released military property and privatization of the military trading enterprises” was prepared according to its initiative. This document implemented a new procedure of the released military property sale: instead of the Defense Ministry the State Property Committee was responsible for the sale of the released military property. The Defense Ministry received the functions, associated with detection of released military property, representation of its inventory to the State Property Committee and provision of its security, guarding and preparation for the sale. The sale of the released military property (except for the armament, combat equipment, ammunition and property, which is not subject to the sale) had to be done in accordance with the current federal legislation regarding privatization and respective governmental resolutions through the Russian Federal Property Fund at the prices, set by the State Property Committee.

Reference: Decree No. 775 cancelled presidential decree No. 1518 of November 30, 1992, “On procedure of sale and use of the released military property”, according to which the sale of the released military property, except for the armament and ammunition was done on the domestic market through the specialized state-run self-maintaining enterprise, and on the foreign market- through the central department of material resources and foreign economic relations of the Defense Ministry. The funds, received from the sale, were spent for financing of construction, purchase of housing and solving of other social problems of the servicemen, including the servicemen, discharged through the military service and members of their families. In addition, the funds, received from the sale of military property, were spent for development, maintenance and capital repair of the military sanitariums, resorts and other social needs of the servicemen, in accordance with presidential decree No. 1518 and resolutions of the Defense Minister. In 1995-1996 buildings and installations for arrangement of military hospitals for treatment of the servicemen, who participated in the armed conflicts, worth 10.5 billion rubles were purchased. The sale of the armament, combat equipment and ammunition from the Armed Forces was done on the basis of presidential decree No. 1008 of October 5, 1995, “On the military-technical cooperation between the Russian federation and foreign countries”, which defined that the export (import) of armament, combat equipment, and military work (services) is conducted only by the state-run company for the export and import of armament and combat equipment Rosvooruzhenie. This document was superseded by presidential decree No. 907 of August 20. 1997, “On measures for tightening of the state control over the foreign trade activity in the sphere of military-technical cooperation between the Russian federation and the foreign countries”.

Kosovan: Meanwhile, since the date when decree No. 775 came into effect no mechanism for the sale of released military property was created. To be more accurate, the State Property Ministry created the mechanism, which takes 6-12 months for registration of the released military property sale, plus the big and unnecessary paperwork.

Here is an example. I recently visited Siberia, and my subordinates complained to me that they can not sale 20,000 pairs of felt winter boots. In the past only one sheet of paper was needed for the sale of such lot but now it is necessary to prepare five different documents for every pair (!). As a result, to sell a lot of felt boots almost 1 cubic meter of paper documents is necessary. The expenditures on paper exceed the value of the felt boots itself.

Question: Did Vice Premier Maslukov support you?

Answer: yes, despite that representatives of the State Property Ministry tried to put the blame for all drawbacks in the sale of the released military property at the doors of the Defense Ministry. They brought almost a kilogram of papers with them, which allegedly confirm that we sit idle. The Vice Premier responded to Victor Pylnev, State Property Ministry representative: “Your papers are an excuse of your own idleness.”

Question: Which measures were taken?

Answer: Your Maslukov ordered the Economics Ministry to form a group of the interested persons and develop suggestions of the accelerated sale of the released military property within two weeks.

Question: Is it possible?

Answer: Of course, it is possible. I think that we can help the group very much. For example, the Defense Ministry already prepared a project of the decree on the new mechanism of the released military property sale. It was already coordinated with the Presidential Administration and is currently considered by the government.

Question: Do we return to the old scheme of the released military property sale?

Answer: No. But the scheme will be simplified, and the Defense Ministry will participate in the wholesale sale of a part of the military property (except for the real estate) through its self-maintaining organizations.

Question: Which profit can be received from the released military property?

Answer: We will not earn much from the sale of the real estate (these are primarily military installations), only 20% of what is released. The rest will be utilized or transferred onto the balance of the local authorities. Unfortunately, the economic situation is so bad, that we can not maintain the objects, which the troops left, except for some airdromes, removed from the Air Force system, on which the commandant’s service was introduced.

From the sale of the aircraft, helicopters, ships, scrap and so on we expect to earn some 1 billion rubles. The government also supports us in the sphere of the released military property sale through the barter schemes. For example, we currently remove the Armed Forces logistics service from the complex of buildings on the Red Square to some other buildings. The complex will be handed to the Moscow government, which will assign 100,000 square meters of housing to us, which means more than 2,000 apartments. Taking into account that there are 7,500 homeless officers in Moscow, this is very good for us.