By June, City Infrastructure, the OOH arm of Jindal Stainless, had won two consecutive bids to construct, maintain and sell media space on more than 600 bus shelters of the Delhi Transport Corp.
(DTC). DTC earns substantial revenue of about Rs 4.5 crore through outdoor ads on these shelters, which cover the arterial routes of Delhi. However, in July, the Municipal Corporation of Delhi (MCD) announced its proposals for the new Outdoor Advertising Policy for New Delhi.
Parivartan has made a considerable investment in this project: it pays a quarterly fee of Rs 93,800 per month per bus shelter in advance to the DTC. It aims to dominate strategic locations with the bus shelters. Under the new policy, however, MCD proposes to legalise a large number of unipoles, service kiosks, flyover columns, building wraps and other service oriented facilities. These proposals are likely to eat into Parivartan’s bus shelter revenue.
A top official in Parivartan, commented on the proposals, “Obviously, this move will have repercussions on our business. The actual problem is the lack of stringent regulations in the outdoor industry. Also, there may be compromises in terms of the quality of the outdoor. We choose to establish the superiority of our product and, therefore, enter into long term contracts because of the huge investments we make. MCD’s outdoor policy will hamper our growth”.
He also mentioned that, “The level of security is the broader issue with us. The project is in partnership with the government and we expect its support.” He says that a cut in the concession fee being paid to the DTC may be one of many solutions, but it is too early to comment on this as yet.”
On the delay in the construction of the second phase of bus shelters, he says, “These are false reports. We had a meeting with RK Verma, chairman and managing director, DTC, and we put across our concerns on the sudden change of the market dynamics. DTC has asked for some time to deal with the issue.” He also mentioned that a possible solution might be a cut in the concession fee being paid to the DTC but that it is too early to comment on this.