Make PPP projects more industry-friendly: OOH leaders

Rapid physical infrastructure development is fundamental to sustained high GDP growth. Today, as the Centre aims to achieve high single digit GDP growth over the next five years, due efforts are underway to attract private investments into the infrastructure sector. Various public private partnership (PPP) projects have also come up in the wake of increasing accent on infrastructure development. At the state and city levels, the OOH industry has defining roles to play in this endeavour. More recently, OOH firms are seen to enter into PPP agreements with state and local bodies to develop public infrastructure like bus stations, skywalks, bus shelters, public conveniences, etc., in lieu of advertising rights, for durations stretching to 20 years.

PPP projects are expected to open up new business opportunities for the OOH industry in the city of Chennai and Rest of Tamil Nadu. During a session themed’Can PPP Projects Give OOH Industry a Bigger Footprint Across The State & Improved Profitability’, R Sridharan, VP – Marketing, Diamond Publicities, G Mani, VP, Armour Display System, Ramesh P, Adinn Advertising Services, Prasath, CEO, Widener Ads (India), and Suryakumar, Head – Business Development, Airvoice Advertising, discussed the scope of doing business better in the region by participating in PPP projects. The session was moderated by Rajiv Raghunath, Editor, Outdoor Asia.

Sridharan said that while PPP projects are likely to open up new business opportunities for the OOH industry in the state of Tamil Nadu, the real benefits will accrue to the participating firms only if the projects are long-tenured with a degree of certainty over the returns.

Mani pointed out that OOH firms will benefit most from PPP projects when each of the players focus upon a particular segment. So long as the firms compete with each other in each segment like railway media, bus shelters, etc., the gains from PPP projects would be rather limited. Patience and perseverance are key success factors in PPP projects, he added. Mani said the participating firms should taking into confidence their respective clients on the efficacy of PPP projects.

Prasath asserted that norms governing most PPP projects do not favour investing firms. Hence, he emphasised the need for PPP norms to be made more industry-friendly, while adding that PPP can be a highly successful model for OOH industry participation in infrastructure development. Prasath also said that infrastructure projects can be innovative and that it has potential not just in Chennai but Rest of Tamil Nadu, considering that 60% of OOH advertising spends in the state are directed at the ROTN markets.

Ramesh said there are little doubts about the compelling opportunities that PPP projects offer but the uncertainty about returns from investments should be duly addressed.

Suryakumar said that the OOH firms should look to participate in developing their respective neighbourhoods, and then the larger community areas, the city and the state. A graded approach such as this will help the OOH firms to play a more meaningful role in infrastructure development, and thereby profit from it.

The majority of the panellists agreed that OOH firms in Chennai and ROTN should look to collaborate, through special purpose vehicles, to take up big-ticket PPP projects. Such combines will be better equipped to take up large projects.