The Lisbon City Council approved this Wednesday the JCDecaux concession contract for the installation and operation of advertising in the cityfor a period of 15 years, paying the company 8.3 million euros per year.
Four years after the Lisbon City Council (CML) decided to “award the concession for the use of the public domain for the installation and advertising of street furniture to bidder No. 5 – JCDecaux Portugal, Mobiliário Urbano e Publicidade, Lda.”, the contract with this company, chosen within the scope of the public tender, was approved by the municipal executive, with 15 votes in favornamely, seven from the leadership of the PSD/CDS-PP, five from the PS, two from the PCP and one from the BE, and two abstentions from Livre and the independent councilor elected by the PS/Livre coalition, a Lusa municipality source said today .
The concession contract between CML and JCDecaux for the private use of the public domain of the municipality of Lisbon for the installation and exploitation of advertising refers to lot 3, which covers the pieces of street furniture from lots 1 and 2, which includes “900 billboards, of which at least 10% must be digital”, 2,000 canopies and 75 public toilets, of which at least 10% must be prepared to receive users with reduced mobility, that is, in wheelchairs. wheel.
Other provisions in the contract are “40 removable billboards, for institutional advertising; a number of large-format digital panels not exceeding 125 and that, together, comprise a total area of advertising surfaces of between 2,500 m2 [metros quadrados] and 3,000 m2; and 20 digital billboards and five digital panels (4×3 meters), to be used exclusively as municipal information equipment”, reads the contract, to which Lusa had access.
In exchange for the granting of the concession, JCDecaux undertakes to pay CML “an annual remuneration of 8.3 million euros”, according to the contract, which determines that this amount is updated annually based on the average annual variation rate of the Consumer Price Index in the last 12 months.
The company must notify CML, within 15 days of the start of the contract, of the places where it intends to install the pieces of urban furniture and, prior approval, must present an installation plan.
“The period of advertising exploitation of urban furniture is 15 years counted from the end of the third month following the date of approval by the first grantor. [a CML] of the installation plan for all urban furniture, without prejudice to the possibility of starting immediate advertising exploration as the furniture is accepted”, according to the contract.
In this context, CML authorizes JCDecaux to “subcontract, in part, the rights and obligations derived from this contract to MOP – Multimédia Outdoors Portugal – Publicidade, SA”.
In June 2018, the CML approved the award of the exploitation of advertising in urban furniture to JCDecaux, for 15 years, after a controversial process that generated a response from competing companies, which led to the intervention of the Competition Authority to determine “whether the transaction in question would constitute a merger“, which culminated, after four years, with the presentation of the contract proposal.
In January of this year, JCDecaux presented “a formal compromise proposal“, consisting of the subcontracting to the MOP of 40% of lot 1 (marquees, canopies and public toilets) of the concession contract, and seven double-sided digital media panels (12 m2) of lot 2, which was subjected to a test market, to allow entities in the sector to rule on the potential legal impact of competition and, “after a prior hearing in which several of the counter-interested parties participated, the Competition Authority issued a resolution not to oppose the merger, with the fixing of conditions and obligations”.
According to the proposal of the current municipal executive, presented by the Councilor for Economy and Innovation, Diogo Moura (CDS-PP), the decision of the Competition Authority of non-opposition was conditioned to the execution of a subcontracting contract with the MOP.
At the beginning of the process, JCDecaux sent the qualification documents to CML and delivered proof of subscription of a guarantee by bank guarantee, in favor of the municipality of Lisbon, for an amount of 2.49 million euros, once the contract was approved. It could only take place after the delivery of the guarantee by the successful bidder.
In 2015, the Lisbon outdoor advertising contracts that the municipality had signed with JCDecaux and Cemusa in 1995 ended and, since then, the municipality has been making additions.
At stake are canopies at public transport stops, information columns, panels for the dissemination of institutional information of the Municipality of Lisbon and other entities with which it collaborates, and public toilets.
Source: Observadora
