The GHMC is in for a double whammy. Apart from losing share in the future advertisement pie of the metro rail, the corporation may have to lose revenue it earns in the form of advertisement licence renewal fee. The Hyderabad Metro Rail (HMR) and project developer L&T Metro Rail Hyderabad sought a blanket one-time approval for erecting advertisement boards along the three metro rail corridors in the recent project review meeting with the chief secretary and other department heads. “Revenue from commercial advertisements, display and hoardings is an important component to make the metro rail project viable. Advertising on the metro rail system, including construction barricades, is necessary,” an official of L&T Metro Rail Hyderabad said. The project developer has sought a directive to the GHMC from the municipal administration and urban development (MA&UD) department for one-time approval for which the authorities accepted it in principle.
GHMC officials said usually the corporation gives permission for advertisement display boards like hoardings, lollypops, unipoles, etc every year. The agencies have to pay the necessary fee to get their licence and it has to be renewed every year. However, the HMR suggested that the advertisement approvals be one-time affair and there would be no renewal during the concession period, 35 years. Similarly, as per the agreement, ad agencies have to either hand over 10% of their hoardings or 10% of their hoardings’ permit time to the corporation in a year for putting up public interest messages like alerting people on unauthorized constructions. Now, the corporation cannot impose such conditions on the metro rail developer. “The latest move will result in a huge loss of revenue. GHMC earns about Rs 25 crore mainly from over 2,000 hoardings, display boards and unipoles in the Greater Hyderabad region. If the L&T metro rail pays the amount it will add at least Rs 25 crore annually to the GHMC coffers,” a senior official of the corporation said.
The GHMC has stopped taking up infrastructure works like laying and recarpeting roads, providing drains and other amenities on metro rail corridors a year ago demanding funds from HMR and also a share in the revenue in future advertisements by the metro rail developer. The GHMC standing committee, chaired by mayor Mohd Majid Hussain, had even resolved to reject work proposals and unanimously passed a resolution in November, 2011 that funds for different projects should be provided by the HMR as the corporation had been facing financial crisis. The committee also demanded 50% share in metro rail advertisement pie. The same resolutions were sent to the MA&UD department in September, 2012. The MA&UD department had rejected the resolutions a few months ago saying that it was the responsibility of the civic body, GHMC, to provide basic amenities like laying roads, construction of footpaths and storm water drains. On the revenue sharing issue, the MA&UD department said payment of 50% advertisement revenue to the corporation would not arise since the agreement with the L&T metro rail was made as per the central government guidelines, no post-bid and post-agreement conditions could be imposed. When contacted, GHMC additional commissioner Jayaraj Kennedy said he has not received any proposal on blanket approval till now.