State agencies to rent, not own, real estate

PanARMENIAN.Net - On May 29, the Armenian government approved amendments to the Law on State Non-Commercial Organizations and related legislation, establishing that state bodies, non-commercial entities, foundations, and other structures will receive real estate through leases rather than free transfers.

According to Armenpress, the aim is to enhance efficiency in managing state-owned property.

Presenting the bill, Minister of Territorial Administration and Infrastructure Davit Khudatyan said the proposal seeks to address long-standing issues with the free-use system, which led to ineffective, partial, or even non-use of state assets. Studies by the State Property Management Committee revealed frequent misuse or underuse of government property.

Khudatyan said lease payments will be funneled back into the state budget, noting this model won’t create extra financial burdens since the payments will come from existing budget allocations. He also stated the reform draws on international best practices.

Finance Minister Vahe Hovhannisyan added that the reform serves multiple purposes. “At times, we provide property to NGOs and other entities as support, but these expenses remain untracked. For better policy transparency and cost estimation, we must document and evaluate them.”

However, Education, Science, Culture and Sports Minister Zhanna Andreasyan expressed concern over how the changes would affect the real estate of institutions under her ministry’s purview.

“While transparency and accountability are vital, the scale of this lease system could pose a significant budgetary burden. Given our obligations to ensure the right to education, this approach raises conceptual questions,” she said.

Andreasyan called for further discussion on the implications for 1,352 schools, cultural, and sports institutions. “This could generate unnecessary bureaucracy and create additional problems,” she noted, according to Aravot.

Deputy Prime Ministers Mher Grigoryan and Tigran Khachatryan both supported the amendment, emphasizing that expert analysis shows the new model will improve the efficiency of state property use.