By: Bhawana Anand
Last updated : December 05, 2017 6:53 pm
Issues like prior permission of concerned municipal authorities, visibility into likely RoI, high license fee, and streamlining of other procedures need to be addressed in order for the OOH industry to view railway media investment opportunities more favourably
Railway advertising tenders are among the major investment opportunities for the OOH industry. Many of the tenders have been floated; pre-bid meetings are being conducted in different cities to further strengthen the proposal, but is the railway advertising tender viable to the OOH industry players? There are mixed reactions to this question from different participating players. On one side, the investment prospects and the supportive approach of the railway authority are being appreciated by the outdoor industry, while on the other side there are concerns expressed with regard to the conditions laid down with regard to the tenders.
Challenges
As per his prior experience of handling Railway media, Sunil Vasudeva, MD, Pioneer Publicity said, “The tenders have inherent issues. The tender document states
Wherein specifically talking about the Delhi OOH Area of the railway tender, Ritesh Vasudeva, Promoter, Hindustan Publicity said, “There is no doubt that rates kept by Railways towards MRP are much below the rates for unipoles in the MCD area, but the sheer size of the package coupled with high uncertainty are key concerns”.
The biggest issue echoed by the entire industry during the pre-bid meeting was that dealing with Municipal Corporations for taking permissions to install sites on the railway premises entails huge risk as it is a time-consuming process and a costly task. To find a practical solution, the railway authority has asked for some time on the matter. However, in exclusive conversation with Media4Growth, Prem Shanker Jha, Deputy Commissioner, SDMC, clearly stated, “Earlier the Railways and MCD were following a revenue sharing model which doesn’t exist any longer and it is definitely a concern for the MCD. And yes the party dealing with the media installation will have to seek permission from the Municipal authority but it will be favourable if they bring back the provision of revenue sharing”.
Suggestions
Pramod Bhandula, Executive Chairman, JCDecaux Advertising India Pvt. Ltd. who sees this as a great opportunity suggested that the processes must not be time consuming in terms of approvals. They should also provide for exclusivity. Also, Increase in YOY license fee @ 10 % is very high and unsustainable.
“Single window system should be introduced for smooth project commencement and sustained operations during the contract period. Reasonable time should be provided afterall the approvals are in place for the date of commencement of the contract to install the infrastructure and commence the contract. And timelines should be in place for refund of EMD, Security Deposit, Electrical Deposit on completion of the contract period as large amounts are blocked in such contracts,” pointed out S Kumar.