Negeri Sembilan Menteri Besar Mohamad Hasan's claim that the privatisation of billboards will standardise their installation in the state and reduce advertising costs holds no water, says the Outdoor Advertising Association of Malaysia (OAAM).

The crux of the issue is the monopoly of the billboard business by a single company backed by the state government - and this is detrimental to the business environment, OAAM vice-president Alex Yew stressed.

NONE If this precedent is left unchecked, Yew warned, it could be emulated by other state governments and spread to other industries as well.

Mohamad last week defended his government's decision to appoint Yayasan Negeri Sembilan (YNS) as the sole agency to take over the management of all the billboards in the state - which had always been owned and managed by some 12 outdoor advertising companies or media agencies.

YNS, which Mohamad chairs, in turn appointed a private company, Semarak Media Sdn Bhd, to manage the multi-million ringgit business, sparking a strong protest from the outdoor advertising industry.

mohamad hasan negeri sembilan mb Mohamad ( right ) argued that the move for YNS to handle the outdoor advertising billboards sector would eventually make it cheaper for advertisers and boost the fees paid to local authorities.

"This move will benefit the local councils as previously the advertisers paid RM22,000 to RM24,000 a year for a billboard to the media agency. The media agency only paid RM1,800 a year to the local council.

"Now, the advertisers are paying much lower rate, RM18,000 a year to YNS, which will in turn pay between RM2,500 and RM3,000 to the local councils," Mohamad said.

However, Yew questioned the logic of the menteri besar's argument, pointing out that if media agencies rented billboards from YNS and sold the advertising space, the advertisers would have to pay  a higher rate, since YNS had hiked the rental.

Unless, he said, YNS skips the media agencies and deals directly with the advertisers.

In this case, all the outdoor advertising companies operating in Negri Sembilan would totally lose their business.

Yew is the director of operations with Kurnia Outdoor Sdn Bhd, a company under advertising giant Big Tree Outdoor Sdn Bhd, which is affected by the monopoly.

'Facilitate business, not monopolise business'

"The state government's role should be to facilitate business, not monopolise business," he stressed when contacted yesterday.

On Mohamad's argument that privatisating the sector would standardise the installation of billboards, Yew reiterated that those in the industry were prepared to follow any guideline the state government sets to achieve this objective.

"Why push us out and monopolise the business? If you want uniformity, give us guidelines and we will follow, but don't use it as an excuse to monopolise the business."

Yew cited the example of the Selayang Municipal Council, which compelled outdoor advertising companies to install a small roof over all billboards in the district, which all the companies have complied with.

"Take the taxi industry as another example. If the government wants all taxis to install new meters, talk to the taxi association and get it to make sure all taxis install the meters.

"You don't cancel all the taxi licences and give them to a single company just to make sure that all the taxis install the new meters, right?" he asked.

Semarak Media a dormant set-up

Yew also refuted Mohamad's claim that Semarak Media Sdn Bhd is not a dormant company, that it has RM1 million in paid-up capital and 20 years of experience in outdoor advertising.

"That is bullshit! The company is a dormant set-up just for the deal. Maybe the general manager of Semarak Media has 20 years of experience in advertising, but not the company.

"If you are in a monopolistic position and earn all the revenue, of course you can hire someone with even 100 years of experience," he said.

A search by Malaysiakini at the Companies Commission of Malaysia last week also revealed that Semarak Media is a dormant company with paid-up capital of RM1 million.

NONE Yew claimed that the menteri besar's defence of the deal has also accelerated YNS's actions in taking over the billboards in the state.

"YNS has become more aggressive in demanding that we tear down our billboards, or else it will do it forcibly."

Under the privatisation plan, Semarak Media will replace all billboards in the state according to the new format and lease them to the outdoor advertising companies.

"If they can do this to outdoor advertising, they can also do it to other industries as well," warned Yew.

YNS has refused to answer questions pertinent to the deal submitted by Malaysiakin i. These include:

  • Why YNS chose not to manage the business directly but handed it to a private company?
  • Was the award of the contract to Semarak Media done through open tender?
  • Why were the other existing outdoor advertising companies not considered in awarding the contract?
  • How will income from the billboards be divided among Semarak Media, YNS and local councils?