MEMBRANA PURPURA DE HALOBACTERIUM HALOBIUM: ESTRUCTURA Y FUNCION.

As per section 196 of the RMC Act, 2001 (and Section 173 (1) of the JMA, 2011) every person who displays any advertisement to public view in any manner whatsoever, shall pay a tax calculated at such rates and in such manner and subjected to such exemptions as the Corporation may with the approval of the State Government determine. The process of award of advertisement rights in the three corporations was as follows:

In RMC, the advertisement rights were awarded to only those private agencies which were registered under RMC. M Corps fixed the per square feet rate of advertisement tax irrespective of location/site. In Deoghar M Corp, advertisement rights were granted to private

agencies through the process of tender.

Dhanbad M Corp adopted the process of service cum advertising rights agreement in which Corporation granted advertising rights to the agencies in lieu of maintenance of lighting system, construction of passenger shelters, road dividers, beautification of roundabouts etc in the Corporation area.

An examination of award of advertisement rights in the three M Corps revealed the following:

5.2.12.1 Deficiencies in tender process and terms of agreement in Dhanbad M Corp

Dhanbad M Corp issued Notice Inviting Tender (NIT) in September 2005 according to which the agencies were required to maintain high mast and

street lights, beautification of roundabouts etc.99 _{in the municipal area in}

lieu of award of advertisement rights.

99 _{(i) Maintenance of high mast and street lights; (ii) beautification of roundabouts;}

(iii) construction of road dividers; (iv) painting of over bridges; (v) construction of passenger shelters; and (vi) perform such other functions as may be assigned by the corporation

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Dhanbad M Corp executed 12 agreements (January 2006 to April 2010) for display of advertisements with three agencies in lieu of five services. Following discrepancies were noticed in award of tenders:

The NIT (September, 2005) in clause no. 6 stated that the advertising agencies had to deposit some fixed amounts in the municipality over and above the services rendered by them in lieu of advertising rights. The municipality did not fix any reserve price beforehand for the auction of advertising rights. As a result, none of the bidders offered any amount to be deposited in the municipality. The offer amount was later decided in a meeting (October 2005) with the representative of the agencies. The agencies were required to pay ` 5.75 lakh per annum. Thus, the process lacked transparency and was beset with the risk of revenue loss.

The Corporation distributed (January 2006) the works for maintenance of vapour lamps, high mast lights, and construction of road dividers at Naya Bazar between M/s Selvel and M/s Scope advertisements. The functions of beautification of roundabouts, paintings of over bridge, construction of road dividers and passenger shelters at other locations of the municipal area which were to be performed by the agencies as per the terms of the NIT were left out at the time of distribution of work. Thus, by not including remaining conditions of NIT in agreements an undue favour was extended to the advertising agencies.

The agreements did not provide for monitoring of services to be rendered by the agencies.

Tender process was not adopted when 10 fresh agreements were executed (between February 2008 and December 2009) with advertisement agencies (8 with Scope, 1 with Selvel and 1 with Ideal Prachar) and rights were awarded to them. In 7 out of 10 agreements, the agencies were not required to deposit any amount to the Corporation against grant of advertisement rights. They were required only to render some specified services in the Corporation area.

Thus, neither the tender process was fair and transparent, nor due diligence was exercised by DMC to get the best of services (or revenue) while awarding the advertisement rights.

On this being pointed out the Secretary, UDD, GoJ accepted (6 February 2014) the audit observation and directed the Municipal Commissioner, Dhanbad to try to vacate the stay order in Hon’ble High Court by hiring competent lawyers. He further stated that transparent process will be adopted for award of advertisement rights in M Corps such as calling of limited tender among registered agencies.

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5.2.12.2 Non-performance of agreed functions by the advertisement agencies

During audit it was noticed that the agencies were reluctant in performing the agreed functions as was evident from the frequent complaint cases received from the ex-ward commissioner, local public and number of warnings and instructions issued by the Dhanbad M Corp. To ascertain the status of high mast and street lights a survey was conducted (July 2006) by Dhanbad M Corp. As per survey report (August 2006), most of the high mast and street lights were out of order.

We noticed during audit that all the agreements with the advertisement agencies were abrogated by CEO (August 2011) following a resolution

(April 2011) of the Board100 _{in view of non/ poor performance of the}

promised services by the agencies. In response the agencies filed writ

petitions101 _{in the Jharkhand High Court and the matter was sub-judice.}

Incidentally, for awarding advertisement rights for display of advertisements in the Railway premises, the Divisional Railway Manager (Commercial), East Central Railway, Dhanbad fixed the reserve price on the basis of the highest annual earnings realised as tax from advertisement in Railway premises during the preceding three years. During 2011-12 the Railways awarded the advertisement rights for a period of five years to M/s Scope Advertisement and Publicity Pvt. Ltd. for ` 48.77 lakh with the condition of enhancement of 10 per cent of the amount of the previous years.

Dhanbad M Corp realised merely ` 5.75 lakh as advertisement tax in a year for entire municipal area in comparison to Railways which realised ` 48.77 lakh only for the Railway premises of Dhanbad Railway Station. Thus, the entire exercise of grant of advertisement rights in lieu of services has so far not borne fruit in Dhanbad M Corp. Moreover, Corporation took almost five years to abrogate the agreement with the agency.

On this being pointed out the Secretary, UDD, GoJ accepted (6 February 2014) the audit observation.

5.2.12.3 Fixation of rates in RMC

For award of advertisement rights, RMC, instead of calling for tenders fixed per square feet rate at ` 105 and ` 120 per year for 2010-11 for hoarding and lighted advertisements respectively by adding 50 per cent to the rates applicable in 2006. Audit scrutiny revealed that the above rates were earlier revised to ` 280 and ` 320 respectively by the standing committee but later reduced on opposition by the advertisement

100 _{The elected body of the Municipal Corporation.}

101 _{(writ petitions no. 4906/2011,4914/2011,4931/2011,4932/2011 and 4934/2011}

by scope advertisements and WP(c) no. 6736/11 and 5211/12 by Selvel Advt. and 5265/11 by Ideal Prachar)

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agencies. Further, the rates were fixed without any scientific survey to find out the maximum market value of the above rights.

On this being pointed out the Secretary, UDD, GoJ accepted (6 February 2014) the audit observation and directed the Municipal Commissioner, Ranchi to adopt the transparent process.

5.2.12.4 Hoardings on private buildings

RMC fixed (February 2012) advertisement tax rates for 2011-12 onwards for hoardings on private buildings at ` 15 per sft. As per the orders of RMC to furnish list of advertisement boards for fixation of advertisement tax, the advertisement agencies furnished a list of 701 hoardings erected on private buildings covering area of 339504 sft without mentioning the date of erection of hoarding (December 2011). Notices were issued to the agencies to deposit advertisement tax for the hoardings for the year 2011-12 but none of the agency deposited any amount for last two years. Neither the corporation verified the correctness of the furnished list nor did it take any action to realise the un-deposited advertisement tax. Thus, due to lackadaisical approach of the corporation, a sum of ` 1.02 crore was outstanding as advertisement tax from different agencies upto March 2013.

On this being pointed out the Secretary, UDD, GoJ accepted (6 February 2014) the audit observation.

5.2.12.5 Advertisements on Guardrails: RMC

RMC concluded an agreement (August 2007) with M/s Third Eye Communication (P) Ltd for installation of guard rails at Road dividers on

Major roads in Ranchi. As per the agreement, M/s Third Eye was to pay

` 800 per annum per guardrails102 _{for advertisements displayed on both}

side of guardrails after every 365 days.

During 2007-11, 3400 guardrails were installed by the agency and total demand against advertisement fee as of February 2012 was ` 58.59 lakh (according to RMC’s interpretation of the contract) against which agency deposited ` 8.32 lakh only (according to agency’s interpretation of the contract). The agency was making payment in interpretation of clause 2 of the agreement that it required to pay the advertisement fee on completion of 365 days of display of advertisement.

In August, 2010 The Executive Engineer (EE), Road Construction Department (RCD), Road Division, Ranchi informed (August 2010) RMC that the guard rails were broken/ bent at several places and were becoming a threat for the traffic and requested RMC to cancel the

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agreement. The dividers were not repaired by the agency and eventually RMC terminated (November 2012) the contract. In response, the agency filed a writ petition in the court against the order. The matter was still sub-judice.

As evident from the facts stated above, due to ambiguity in the terms of contract a sum of ` 50.27 lakh remained outstanding and was yet to be recovered till August 2013.

On this being pointed out the Secretary, UDD, GoJ accepted (6 February 2014) the audit observation.