A MARKETING giant is in talks over a lucrative deal to manage advertising on the tram network without the council holding a tendering contest – prompting claims the cash-strapped city will lose out on much-needed income.
Talks have opened between the city council and JCDecaux – which already looks after advertising on bus stops across the Capital – over the deal, prompting warnings of legal action from a rival firm.
And senior business figures in the Capital fear the move will create a monopoly and fail to bring in a market price for advertising on the city’s fleet of 27 trams.
JCDecaux last year signed a £5 million-a-year deal to manage and sell advertising on the city’s bus stops, billboards and street furniture – and has now applied for planning permission to advertise on tram stops.
However, when it beat off competition from rival firm Clear Channel during the bus stop tendering competition, the right to manage tram stops and carriages was not included in the contract. Now Clear Channel has warned that if the tram advertising – believed to be worth around £1.5m – is added to the bus shelters contract, the entire tendering process could be “invalidated”, raising the prospect of a legal challenge.
Global brands such as Etihad Airways are believed to be keen to decorate Edinburgh trams with advertising, but one senior business figure said the lack of transparency could put them off investing.
The source said: “The sheer scale of the advertising they would run across the city would be verging on monopoly.
“The main concern is that by not going to competitive tender, you are not getting the full value of what the trams are worth as advertising space.”
They added that potential advertisers named which have connections with the tram project had expressed concerns about the way the scheme was being handled. “My concern is that the way this is being handled could cause the city to lose some major blue-chip partners because of the lack of transparency,” the source said.
A spokesman for Clear Channel told the Evening News: “Having submitted a strong proposal when the bus shelter contract was tendered last year, we would be deeply surprised if the tram shelter contract in Edinburgh was now to be awarded alongside the bus shelter advertising contract without a rigorous and transparent tender process.
“We believe competitive tenders are the best way to ensure value for money for the Edinburgh taxpayer and would be concerned that this development could invalidate the bus shelter tender process.”
The Evening News understands that JCDecaux is the only firm currently in discussions with the council regarding advertising on the trams – but a council spokeswoman said the talks did not rule out the possibility of a competitive tendering process in future.
A city council spokeswoman said: “Work is ongoing to ensure we maximise the value to the council from tram advertising and naming rights.”
A spokeswoman for JCDecaux said the company would not be commenting.