The Slovenia Times

Flaws in Municipal Real Estate Deals


The court finds problematic the plans for sale, the valuation procedure and the methods of sale. Often direct contracts are signed where there is no legal basis for that, Šoltes said.

The court issued a qualified opinion to Nova Gorica, while Ljubljana and Murska Sobota got an adverse opinion. In Murska Sobota, contracts where irregularities were found are worth a combined EUR 1m, while in the capital they are worth EUR 14.5m.

The municipalities are not obligated to submit a report on remedy measures, because they have been correcting irregularities and introducing the necessary measures already during the audit procedure. Šoltes added that there was no suspicion of crime.

However, he stressed that the oversight over the municipal management of immovable property was difficult due to the large number of municipalities in the country and that sanctions should be envisaged for wrongdoing in this area.

He believes that municipalities should not be completely autonomous in dealing with real estate and that the state should play a bigger part in this.

Slovenia lacks a national strategy in this area, which is demonstrated by the frequent changing of the legislation. The act on local self-government has been changed 15 times and the act on the financing of municipalities six times, he noted.

Former Ljubljana Mayor Zoran Janković, who is running for mayor again at the upcoming local by-election, responded by saying that the municipality "made a good deal" in terms of the number of land sales and methods of sale.

He also touched on the court's finding that the municipality failed to draft individual sale programmes, saying that recent changes to the relevant legislation had already corrected this.

His main rival in the mayoral elections and the joint candidate of New Slovenia (NSi) and the Democrats (SDS), Mojca Kucler Dolinar, sees the court's report as yet another proof that Janković's work was foul.

"Based on the (court's) report, we can assume that the former mayor dealt with the land according to his 'inner instinct'", Kulcer Dolinar said, adding Janković handled Ljubljana's money "non-transparently and unfairly".

The Nova Gorica municipality meanwhile said that it had already introduced measures to correct certain irregularities. Among other things, it started drafting a record of land owned by the municipality.

The Association of Municipalities and Towns, one of two main municipality associations in Slovenia, said they would welcome changes that would prevent corruption risks in real estate deals, but only if these would not encroach on their autonomy.


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