Sale of Latvia's secret Soviet town in doubt

Feb 23, 2010, 11:54 GMT

Riga - The future of a former secret Soviet military town in Latvia that was sold at auction for nearly 3 million dollars looked uncertain Tuesday when it emerged that the winning bidder had yet to pay up.

The daily Neatkariga reported that Russian-registered company Aleksejevskoje-Serviss failed to make a deposit of nearly 100,000 lats of a total 1.5-million-lat (2.8-million-dollar) price tag for the 45-hectare site, known as Skrunda-1.

The settlement, 150 kilometres south west of the capital Riga, was built to house 5,000 Soviet military personnel and their families and was in a restricted zone due to the presence of top-secret listening stations nearby.

Latvia, now a member of the European Union, regained its independence from the Soviet Union in 1991. The last Russian troops withdrew in 1994.

For more than a decade, Skrunda-1 has lain empty, and the harsh Baltic winters have taken their toll on the dilapidated site that included 70 buildings with apartments, shops and a dance hall.

There was surprise at an auction on February 5 when unknown Russian firm Aleksejevskoje-Serviss bid successfully for the site, with an amount 10 times larger than the expected price.

Latvian nationalists were disturbed that Russians would again take control, particularly as little information was forthcoming about the winning bidder and its intentions for Skrunda-1.

Rumours circulated that the town might become a pig farm, to the dismay of local people.

The Latvian Privatization Agency, which handled the sale, said Monday that it might offer Skrunda-1 to the second-placed bidder, an Azerbaijani national named Magamed Gurbanov.

However, details about Gurbanov have proved as elusive as those of Aleksejevskoje-Serviss, reported Neatkariga, raising the possibility that a completely new auction may have to take place.