OOH: CAG raps NMC for loss in advertising policy

Televisionpoint.com Correspondent | Nagpur
The office of Comptroller and Auditor General (CAG) has castigated the Nagpur Municipal Corporation (NMC) for losing Rs 78.38 lakh due to irregularities in executing the outdoor advertising policy. The current advertising policy was implemented in 2001.

As per the tender issued by the civic body, the successful bidder was to furnish the NMC with a security deposit equal to 25 per cent of the total lump sum rentals quoted for one year by the contractor. If the contract was renewed by NMC for the next year, the contractor was to pay 25 per cent of the amount payable for that year as security deposit.

The contractor had produced a bank guarantee having validity up to September 5, 2003 for Rs 5.5 lakh. Even though the contract was in existence in May 2008, it was neither extended nor was the security deposit for a further period furnished by the contractor to the NMC.

The CAG also noted that as per the tender if the contractor found any advertising site unsuitable then he would either be provided with an alternate site or the NMC would refund the amount by deducting the total amount to be paid by the contractor.

There is no record showing that NMC had given any such concession to any contractor. Ideally, the NMC should have recovered rental from the agency at the rate quoted by it irrespective of the number of hoardings put up by it.

However, the CAG found that the NMC did the recovery on the basis of units where the agency actually installed the hoardings. According to the formula for calculation of the amount payable to NMC, the contractor was to pay Rs 123 lakh to the civic body.

Moreover, as the NMC collected rental amount only on sites where hoardings were actually installed, the revenue garnered by the NMC amounted to only Rs 42.79 lakh. Thus the NMC lost a whopping Rs 78.38 lakh due to this practice.