Authorization to Sell War-Damaged Government Buildings: A Plunder of Public Assets?

Directive No. 51/6224, issued by the Office of the Treasurer General, has allowed the sale and barter of government buildings damaged in the war. The stated aim is to quickly raise funds for rebuilding war-hit areas and avoid unnecessary, uneconomical costs for repairing and maintaining damaged structures. On the surface, the measure appears to offer a fast solution for reconstruction financing. But beneath it lie deeper concerns over opportunity, rent-seeking, and economic risk. In the emergency and disorder of war, the possibility, or even the willingness, to properly monitor such a large volume of bartering is weak. This could turn the directive into the “legal plunder of public assets” under the cover of reconstructing damaged buildings.

Bartering Damaged Government Assets

Directive No. 51/6224 was issued on April 19 by Rahamatollah Akrami, the Treasurer General. It allows executive agencies to decide the fate of government buildings damaged in the war, especially those that are beyond repair or have suffered major damage.

Under the directive, executive agencies must use legal avenues to sell or barter these properties, exchange damaged buildings with the non-governmental sector, and use the resources generated for infrastructure resilience and securing necessary liquidity.

In government financial terminology, “barter” means transferring ownership of assets to settle debts or secure resources. It is usually used when liquidity is tight, and the government needs a quick, operational way to raise funds.

“Hassan Ali Mansour,” an economist, tells IranWire that if these assets are sold through open auctions, there is no problem, since government buildings often do not provide services proportionate to their maintenance costs. The concern, however, is that this decision could become a pretext for transferring public assets to “insiders” at unrealistic prices. He stresses that such sales in the Islamic Republic are rarely open to all buyers, and what actually happens must be closely watched.

Economic Criticisms

Hamed Zolfaghari, an economic activist and financial consultant in Iran, takes a different view. He states: “The enemy has attacked the country’s vital centers and infrastructure in this war; why should the government sell them instead of allocating budget to reconstruct these state infrastructure assets that were strategically located and established over the years, based on expert opinion, to serve the public? Is this decree not formulating the mindset that the government, in the current state of uncertainty, is merely approving measures that either remain ineffective and neglected or will be used by profiteers close to those issuing these very directives? Would it not be better to reduce the haste in auctioning off the public treasury and instead strengthen your role in stabilizing the economy and people’s livelihoods?”

He says the country’s budget bills did not allocate funds or resources for damages caused by war and sanctions. In his view, the Foreign Exchange Reserve Fund should legally be used to compensate for such losses.

He adds: “It is unclear whether the government intends to downsize itself or increase revenue with this decision. This plan does not consider the employees of these offices or their functions. How are employees to be transferred to other centers that are already operating at maximum capacity in inefficient buildings, and what is their status?”

Advantages

The directive can be seen as a continuation of the government’s “Asset Productivization” program, which seeks to turn unused properties into financial resources. Reports suggest that the government has earned tens of billions of tomans from this source in recent years.

One possible advantage is quick access to liquidity during a financial crisis. In critical situations such as war, selling or bartering assets can generate resources faster than raising taxes or borrowing.

Another possible benefit is lower maintenance costs. Maintaining destroyed or semi-active buildings, or even demolishing them for reconstruction, can be expensive. Removing these assets from the government’s books may ease budgetary pressure.

Bartering can also help reduce the government’s accumulated debts to major contractors or institutions such as the Social Security Organization without requiring cash payments. In addition, directly exchanging property for contracting services and handing over damaged buildings to the private sector can bypass the delays of long government tenders. This could, in theory, speed up the reconstruction of vital infrastructure such as schools and hospitals.

Criticisms and Concerns

The main warning raised by some analysts, as mentioned earlier in this report, is that this could repeat the experience of privatization, where government assets were transferred to settle state debts. Such a process creates fertile ground for rent-seeking and large-scale corruption, both of which have repeatedly appeared in the Islamic Republic’s history during similar schemes. The bitter legacy of previous privatizations ended in questionable valuations and controversial auctions that benefited certain organizations, foundations, military and security institutions, or individuals linked to influential figures and political officials.

     1. The Risk of Selling Below Real Value

Past experience shows that asset valuation can be manipulated or, under certain conditions, set below real market value. This is especially likely during wartime and emergency conditions. War-damaged buildings, in particular, may be valued far below their actual worth simply because of their damaged appearance.

In barter deals, pricing is two-sided and much harder to monitor than in cash transactions. This can allow contractors’ project costs to be inflated while the value of government properties is understated.

     2. Rent-Seeking and Favoritism

Because pricing is complex and transparency is limited, bartering creates an ideal environment for rent-seeking. The suspicion that properties may be transferred to specific individuals at a fraction of their real cost is not new. Similar concerns have been seen in privatization and “asset productivization” processes. There is a serious risk that certain individuals or entities, using influence within executive agencies, could acquire land and buildings in valuable urban locations at very low prices, then make enormous profits once the area stabilizes or is reconstructed.

     3. Loss of Long-term Government Assets

Selling assets to solve short-term liquidity problems may create much larger costs for the government in the future, especially if the properties are strategically important or located in key urban areas.

     4. Inefficiency in Solving Structural Problems

The sale and barter of damaged government buildings is essentially an emergency crisis-management tool, not a sustainable economic solution. Fast liquidity is only a temporary fix. If the budget deficit and deeper structural weaknesses of the economy are not addressed, the money raised will be quickly spent, and the same problem will return.

Economic Impacts

The government has presented the barter plan for damaged properties as a way to “secure necessary liquidity.” But if the money raised from these sales is used for current budgets or short-term expenses, it becomes a case of “selling wealth for consumption.” This is not productive and weakens the national balance sheet in the long run by reducing the government’s fixed assets.

At the same time, releasing a large number of government properties, even damaged ones, into the market in war-hit areas could sharply lower land prices there. While lower prices may appear positive at first, they can signal a serious disruption in market balance. For residents whose damaged homes are their only asset, this could mean the destruction of their capital and a reduced ability to rebuild on their own.

Government buildings usually serve administrative, educational, or public-service functions. When sold to the private sector, they are often accompanied by “change of use” permits to make them profitable. This can disrupt the real estate market and reduce the city’s public-service capacity. In the future, the government may then have to pay many times more to replace the same buildings.

There is also a broader concern: turning “land and buildings” into “cash” during wartime, when fixed asset values have fallen, is strategically a form of selling national assets cheaply. Buyers may make huge profits, while future governments may struggle to compensate. They could be forced to rent or re-purchase land at much higher prices to house offices and provide public services.

History of Similar Policies in Iran

This is not the first time the government has turned to public assets for quick liquidity.

Debt-for-Asset Swaps in the 2010s: Facing financial pressure, the government swapped corporate debts with tax liabilities or debts owed by legal entities to state institutions.

Asset Productivization in 2022: This controversial plan, implemented by the 13th government and proposed by Ali Khamenei, involved the sale or barter of “surplus” properties. Critics saw the creation of a seven-member board, immune from judicial oversight and media criticism, as a major source of corruption. The fact that officials involved in the process felt the need to demand judicial immunity was itself highly suspicious.

Social Security Settlements in 2025: The 2025 budget bill required the government to transfer certain movable and immovable assets to the Social Security Organization to settle state debts.

A review of these policies shows that while they created short-term resources, they were repeatedly criticized for lack of transparency, questionable pricing, and inefficiency.

In summary, selling and bartering damaged government buildings is an emergency crisis-management tool, not a sustainable economic policy. Without full transparency, strict oversight, and independent valuation, it is more likely to result in public assets being transferred to selected individuals at below-market prices than in genuine infrastructure reconstruction.

This risk is even greater in the current climate, where the shadow of war and an unstable ceasefire create urgency around appraisals and transfers. The lack of transparency makes the process even murkier and opens the door for abuse by those close to government and military circles. Under such conditions, it is entirely possible for influential interest groups to acquire government buildings in prime urban areas by labeling them “beyond repair,” even when the damage is minor.