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Investors invited to buy tatty schools

Germany

The state goverment is selling off dilapidated school buildings in east Berlin to private investors. The investors will renovate the schools and then lease them back to the education authority, writes Yojana Sharma.

Bids have been invited for 57 schools, some of them threatened with closure. If no offers are received their fate is uncertain.

Schools in the eastern part of the city suffered years of neglect under communism. In one area, Hohenschonhausen, 34 of the 45 school buildings are in dire need of repair. Citywide 100 classrooms in 12 schools are too dangerous to be used. It would cost Pounds 66 million to renovate the schools.

Although several schools in the west of the city need modernising, only those in the east are being offered for sale. The city authority believes that federal tax concessions allowing investors to offset as much as 40 per cent of the cost will make the sale attractive and the lease-back to city authorities cheaper.

Critics, however, have said such "creative" accounting is unconstitutional.

Last month the Federal Constitutional Court issued a temporary injunction forbidding the sale of state buildings by the Schleswig-Holstein government to the state investment bank on a leaseback deal, saying it amounted to a state loan. However, the Berlin authority says the ruling does not apply to sales to private investors.

The state of Hessen has already sold and leased back five schools to a Duesseldorf-based subsidiary of the Deutsche Bank.

The company has said it will buy a number of schools under the Berlin sale-and-lease-back scheme. School lands will remain the freehold of the city.

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