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Slowdown affects Gujarat hoarding biz

February 03, 2009 15:57 IST

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Ahmedabad Municipal Corporation has suspended an outdoor hoardings contract with ADAG's Big Street for the city's arterial Ashram Road and is planning to invite fresh bids for the SG Highway contract, AMC officials said.

"We have suspended the contract with Big Street and are in negotiations with its representatives for a solution," AMC Commissioner I P Gautam told PTI, adding, "the decision of inviting fresh bids would be taken only after resolving the issue with Big Street".

Fresh bids would also be invited for SG highway contract as the slowdown has forced the civic body to reduce the contract's minimum value from Rs 18 crore (Rs 180 million) to 10 crore (Rs 100 million) per annum, he said.

ADAG-owned Big Street was awarded the contract for outdoor hoardings on Ashram Road last May.

Big Street, the only bidder then, had sought a three-year contract for Rs 5.04 crore (Rs 50.4 million) per annum while the AMC had kept Rs 4 crore (Rs 40 million) per annum as the minimum value for the bid.

According to civic body sources, Big Street asked for 30 per cent discount on the rate and extension of the contract by two years as it was not able to recover revenue owing to slump in business.

"Big Street is not getting business because of slowdown in the economy as companies have cut down their budget for outdoor publicity," a senior official from an outdoor advertising agency said.

"It (Big Street) did not get business because it had obtained the contract by quoting unrealistic prices. So it offered media space to companies at a much higher price when the economy was going down," he said.

Compared to December-January 2007-08, the outdoor hoarding business is down by 50 per cent this year but is likely to pick up by February end, the official said.

"Outdoor hoarding business is down by 25-30 per cent because big spenders like airlines, mutual fund companies, banks, mobile and insurance companies have cut down their budget drastically," Sambhav Media Chairman Kiran Vadodaria said. Apart from cutting down budgets, clients are asking for discounts on sites (hoardings), he added.

Sambhav Media is one of the largest players in the outdoor sector in Gujarat with a volume of around Rs 125 crore per annum.

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