Digital display boards to fill only private firm’s coffers

Coimbatore: In yet another privatization move, the city corporation is all set to lose out a huge chunk of revenue, which otherwise would have come to its kitty, to a company that was awarded the smart display board project.
While the city corporation would be earning just a miniscule amount as fee from the company for installing digital display boards, the latter would make roughly 240 times the money it pays the civic body every year.

A back-of-the-envelope calculation, based on the proposals the company has given its clients, shows that it would be charging Rs 6 to display advertisements for 10 seconds, which is considered one slot. An advertisement would be played for 480 slots a day. So, an advertiser opting for 480 slots will have to pay Rs 86,400 and an additional 18% GST, which makes it approximately Rs 1 lakh. The company can book a maximum of 12 advertisements for all the 480 slots, leaving it with a bank balance of Rs 12 lakh a month from a single board.

But the company will be paying just Rs 5,000 as rent to the corporation for erecting the display board on its land. Though the company would be spending Rs 15 lakh to install a board, it would take back the amount in barely a month and the revenue from the remaining months would go to its kitty.

Under the smart city project, the corporation has given permission to a private advertising agency to install and maintain smart display boards at 30 major junctions in the city. Presently, the boards are installed at seven places, including Gandhipuram, Town Hall, Upplipalayam, Saravanamapatti and Kuniyamuthur. If the company makes Rs 12 lakh from a single board a month, it would be earning Rs 84 lakh from all the seven boards while paying just Rs 35,000 to the civic body. In a way, the civic body is losing crores of money every year which could have been tapped with better fiscal planning.

While the agency is allowed to play advertisements for 80% of the time, public information messages will be displayed for the remaining time. Apart from that, information pertaining to temperature, air pollution, date and time will also be displayed.

Singanallur MLA N Karthik said striking a deal with the agency for 15 years was unacceptable as the corporation would not even be able to revise the rate for the agreed period, while revenue of the company would be increased from lakhs to crores within a few years.

He said the act of the corporation appears to have been done for the welfare of the private company and not for the welfare of the public.

When contacted, corporation commissioner K Vijayakarthikeyan said there were provisions to revise the rent as per the Coimbatore Municipal Corporation Act and they were set to review the project soon.

Corporation officials, meanwhile, admitted that they hadn’t realized the project’s revenue potential. “The tender was floated as we didn’t have sufficient manpower to install and maintain boards and appointing new officials to maintain it would become additional expenditure. As only one bidder had participated, the contract was given to his bid amount,” said a corporation official.