Auction of Estonia's TOP fails

TALLINN, (BNS) - Privatization of Tallinn's Olympic Yachting Center (TOP) in a public auction has failed as no buyer placed a bid for the sports, trade and hotel complex by the Dec. 8 deadline.

The only potential buyers who took out the tender documents were former banker Targo Raus and the real estate firm Arco Vara.

The chief manager of TOP, Raimo Kagu, has said that probably no one will take part in the bidding with a starting price of 250 million kroons (over $14 million).

"Only a madman or a very high-flying rascal would bid tomorrow," Kagu, who has announced his resignation said in remarks to a local daily on Dec. 7.

Kagu said the fair price for TOP was 50 million kroons, as no one had said whether the object of sale was only the buildings or also the land.

The right of decision regarding the sale will now again pass to the government, which must announce a new auction.

The sale of the last state-owned commercially used real estate property in Estonia is conducted under state property law, which means that all of the proceeds will go to the state budget. The national budget currently is facing a 600 million kroon shortfall in revenue intake from the sale of state property alone.

TOP, situated in Tallinn's western seaside suburb of Pirita, consists of a hotel, a trade center, sports facilities, a water sports and recreation center, and a yacht harbor.

The Estonian Culture Ministry will propose to the government that the privatization agencyÊshould make another announcement of the sell-off of the Tallinn Olympic Yachting Center (TOP) without changing its sales terms and initial bidding price.

Although the public sale of shares in TOP failed in the first attempt, probably because of a high initial price, the ministry suggested the price should not be changed, a spokesperson for the ministry said.

Culture Minister Signe Kivi told BNS via the spokesperson that in the near future the ministry would make a proposal to announce a new tender without any change in the price.

Kivi said a large number of bidders would have shown that the price was too low.

"There was lively interest in TOP," Kivi said, adding she did not regard the first attempt as a failure.

Kivi refused to comment on the behavior of Raimo Kagu, director of the firm, during the sell-off process, she only said Kagu would soon resign from office anyway.

On the day of the deadline for bids to TOP Kagu said that only "loonies or very tough scoundrels" would make bids to shares in TOP.