The Hindu : Andhra Pradesh / Hyderabad News : Ad windfall for GHMC

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Wednesday, Dec 24, 2008
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Andhra Pradesh

Andhra Pradesh - Hyderabad

Ad windfall for GHMC

Corporation to earn more than Rs. 10 crore for next 3 years

Bid-cum-public auction conducted for glow and neon sign boards
City divided into four zones of A, B, C & D with different advertisement rates

HYDERABAD: The GHMC will be garnering at least Rs.10 crore or more for the next three years as advertisement fee from its numerous glow and neon sign boards. With a private firm, USM Business Systems, bagging the contract during a marathon bid-cum-public auction conducted on Monday night, this income is ensured for GHMC.

Initial payment

The firm quoted above the upset price of Rs. 6.50 crore and on winning the bid, it paid up Rs. 50.10 lakh (five per cent bid amount) as initial payment, said Additional Commissioner (Finance) B. Ramesh Babu on Tuesday.

Four firms responded to the bid-cum-open auction of which three submitted their bid documents before the stipulated time and all the documents were evaluated by a technical committee.

There are an estimated 1.25 lakh such advertising boards and a maiden effort made three years ago to get revenue from them got into a legal battle between the then designated firm – Nest, and GHMC. The agency refused to pay more after an initially payment of Rs. 4.39 crore.

Precautions taken

Amid complaints of “overcharging” and going beyond its mandate from several quarters, the firm has claimed it was unable to pay more since it faced stiff opposition from the citizens towards the collection. The municipal corporation has cancelled the contract with it and filed a case in the court seeking balance payment of Rs. 13.11 crore. To avoid a repeat of the “bad experience”, GHMC has taken adequate precautions, said Mr. Babu. These include selecting firms with a turnover of Rs. 30 crore and a net worth of Rs. 15 crore and seeking payment of five per cent of the bid amount as the first payment.

It was made clear fees cannot be collected from advertisements on bus shelters, cinema slides, hoardings, uni-poles, paintings, etc. The State capital was divided into four zones of A, B, C & D with the rates per square metre being – Rs. 1,200, Rs. 1,150, Rs. 800 and Rs. 700.

As per the contract, the firm has to pay Rs. 10 crore for the current year and increase the payment by 25 per cent each for the next two years of 2009-2010 and 2010-2011. In the first year, 50 per cent sum has to be paid within a week of the official order and remaining before April end in three equal instalments.

The revenue collection was being outsourced as its bill collection staff was inadequate, added Mr. Babu.

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