A report says the federal government's ambitious plan to dispose of a real estate empire worth as much as $3 billion was quietly shelved by the Liberals in mid-January. The Financial Post reported that companies that had submitted proposals to the federal government to conduct a study on how the government could maximize the value and efficiency of its property portfolio got rejection notices around Christmas.

"We received a letter saying "We got your submissions and you do not qualify and neither does anybody else,'" said one source.

The study was to consider a range of options on how the federal government should deal with its massive property portfolio, which comprises 327 buildings with a total area of 75 million sq. ft. This does not include such high-profile properties as Parliament Hill.

In its request for proposals, the federal government said the study would examine various options on how to deal with its real estate holdings, including creating a real estate investment trust or selling ownership in the buildings to the private sector.

The government first mused about selling the real estate portfolio in September 2004. In August 2005, then-Public Works Minister Scott Brison told a Toronto business audience the federal government would seek independent outside advice on how to manage its portfolio of real estate across Canada. "The status quo is not acceptable," Brison told the Economic Club of Toronto.

It finally put out a request for proposals for the study a year later with a deadline this past October. As early as December, Public Works and Government Services Canada said it had received a number of submissions from investment banks and was reviewing them.

The chance to advise the federal government on how to deal with its property assets attracted a number of consortiums. The criteria required to win the contract to conduct the study was stringent and resulted in real estate firms teaming up with investment banks and other industry experts.

The Financial Post report said the bidders felt no one "would have been good enough" to meet the requirements of the government's tender. One of the biggest problems, said one real estate industry executive, was the federal government decided that if a firm or consortium was going to be part of the study advising the government then it would be disqualified from involvement in any sale of the buildings or in any transaction involving conversion to a REIT.

This article is protected by copyright and is licensed only for your personal use. All other rights are reserved. This article may not be reproduced, retransmitted, disseminated, sold, distributed, published, broadcast or circulated without the prior written consent of CanWest Global Interactive Inc.