Land auction

Land is becoming a commodity that can be bought and sold in Ukraine. This activity is a simulation of land auction that can lead to a discussion of these issues.

Lviv has a population of about 800,000 and is growing steadily each year. The city is located in Western Ukraine and is the largest urban centre in this part of the country. The city council has decided to have a land auction to provide for the growing needs of the city and its growing population. This auction will help get money for the budget (to pay teachers, doctors and workers). 100 hectares east of the city will be sold which consists of 40 hectare agricultural fields, 40 hectares of forest and 20 hectares of forested hills along a stretch of the river. The five organisations that will take part in the auction are: Nature Protection Association, Ukrainian Forest Products Corpora­tion, Apartment Construction Company, Lviv Electric Company, Lviv City Administration.

Nature protection association. Specialists have found a rare plant species that grows in forests being auctioned. You have decided to protect this plant species by creating a nature reserve (minimal size 20 hectares). You have 75,000 hryvnias.

Ukrainian forest products corporation. Your business makes a good profit selling wood to home builders (including Apartment Construction Company). You have told some rich friends that you can make even more money by buying land with forests at the auction. They give you 100,000 hryvnias and tell you that you need to buy a minimum of 20 hectares of forested land.

Apartment construction company. There is a great need for apartments in Lviv. You have investor partners and a business plan to build an apartment complex and a shopping centre. You need 12 hectares for apartments and 20 hectares for the shopping centre. Remember that apartments close to the city will sell for higher prices and increase your profit. You have 160,000 hryvnias.

Lviv electric company. Sometimes Lviv gets its electricity turned off. There are factories and businesses that are starting to be successful and need reliable electricity supply. A new electric power station in Lviv will help the economy of the region grow. To build a new station you need 12 hectares. Because you need a lot of water to operate the station, the station should be located near the river. You have 60,000 hryvnias.

Lviv city administration. Because some factories and businesses in Lviv are beginning to be successful you have more money (from taxes) in your budget. Also after land is sold to people in the auction, you can get more money from taxes on privately owned land. To help your political career you need to make life better for people in Lviv. You decide you will clean all the garbage from the city, but for this you need to build a new garbage dump. Also you want to build a new cultural centre and a concert stadium next to the road. You need 8 hectares for the garbage dump and 8 hectares for the cultural centre. You have 50,000 hryvnias.

Auction rules: 1. Each lot consists of 4 hectares. 2. The starting price of each lot is 10,000 hryvnias and can be increased in 2,000 hryvnias steps. 3. After buying a lot the buyer has the right to buy any of the four nearby lots (above, below, to the right, to the left) at the same auctioned price. 4. Before the auction begins, the group (together) decides which lots to buy and the maximum price they are willing to pay. 5. Each group chooses one person that will represent it in the auction. Only he/she can take part in the auction. Groups cannot speak with each other before or during the auction.

The following symbols mean:

hhh –the river;

ççç – the highway;

PP –forested lands;

GH H – the city of Lviv;

ííí – fields.