After a seven-year hiatus, Bengaluru’s civic authorities introduced new advertisement bylaws, aiming to rake in an impressive ₹500 crore in revenue. Yet, these ambitious regulations have fallen flat, failing to capture the interest of advertising companies.
The Greater Bengaluru Authority (GBA) recently had to scrap its advertisement tenders, initially floated in late July, due to a severe lack of engagement from potential bidders. Despite a promising pre-bid meeting that saw over 50 firms attend, a reliable source within the civic body revealed to The Hindu that only two companies bothered to show any concrete interest.
Originally, the BBMP structured these tenders into eight distinct packages, with each package granting exclusive advertising rights within a specific zone of the city.
“While two companies initially expressed interest, neither fully completed the tender process, preventing us from moving forward with the bidding,” the source explained. Interestingly, officials weren’t entirely surprised by this lukewarm response.
A major point of contention was a clause in Karnataka’s new bylaws, inspired by Delhi’s advertising regulations, which mandated winning bidders to pay an upfront fee equivalent to five times their bid amount. Advertising firms highlighted this “costly affair” during the pre-bid discussions, citing it as a significant deterrent, especially for smaller businesses, before the process even properly started.
A Major Hurdle for Bengaluru’s Tunnel Road Project
This tender debacle also casts a shadow over the State government’s ambitious Tunnel Road project. B-SMILE, the entity managing the project, secured a crucial sanction from the Housing and Urban Development Corporation (HUDCO) with a commitment to use advertisement revenue, alongside premium Floor Area Ratio (FAR) income, for loan interest repayments. With advertisers now shying away, the GBA faces immense pressure to devise more appealing regulations to attract companies, especially given the financial implications of the HUDCO loan.
Why Advertisers Are Hesitant: Key Concerns
According to one advertising company owner, local firms typically show strong interest in civic body tenders. However, the “unnecessarily high costs” associated with these new bylaws effectively drove them away.
He further pointed out several technical shortcomings, including insufficient time to secure No Objection Certificates (NOCs) from the advertising department and a lack of clear guidance on how to apply for the newly mandated fresh advertising rights. GBA sources confirmed that a mere 10 firms bothered to apply for these new rights.
Another significant hurdle was the requirement for historical documentation to obtain an NOC, a prerequisite many local firms simply couldn’t meet to prove their track record. These concerns were duly communicated to the civic body.
Back to the Drawing Board: Crafting Fairer Rules
The same source informed The Hindu that the civic body is now revisiting its framework, effectively heading “back to the drawing board” to formulate revised regulations.
“All feedback and requests from advertising companies are being carefully considered as the civic body scrutinizes the laws for any existing loopholes,” the source stated. They added that “changes can be expected wherever absolutely necessary,” emphasizing that the revisions aim to rectify the current bylaws’ deficiencies.
Local advertising firms are keenly awaiting these developments, hoping the GBA will mitigate the high-cost barriers and create a more inclusive environment for smaller businesses.
A final decision is pending on whether the new tenders will be issued by the recently formed corporations or by the GBA itself.