Corruption schemes prevail in how the advertising business is run by the Kyiv City Hall, said Vasyl Gatsko, leader of the Democratic Alliance faction in the City Council, during the Feb. 25 news conference.
The city is short of hundreds of millions of hryvnias due to untaxed
advertising.
Officially, there are as few as 10 advertising banners above city
streets, generating only Hr 48,500 for the budget. “However, when we went
to Hrushevskogo Street, we counted as many as 16 trolls (banners) there. On
Sagaydachnogo Street – 16 trolls, Naberezhno-Lugova street – 22 trolls,”
Gatsko said.
Overall, there are as many as 1,500 overhead advertising banners around
Kyiv streets. That should bring Hr 20 million in fees, 400 times more than the
budget receives.
“The money goes directly to the pockets of corrupted
officials,” Gatsko said.
To place an ad on the city streets, one has to work with Kyivreklama, a publicly run agency. However, it remains highly
inefficient, according to Democratic Alliance leader. Its staff should be
substantially cut, he says.
Kyivreklama claims it lacks the technical capacities to remove the
unregistered billboards and other unofficial advertising. “I’m sure, it
has all the technical capacities it needs,” Gatsko replied.
Budget-funded meals for the kids in public schools are financed with two
sources – city-run parking lots and advertising. “We are against financing
these meals with these two revenue sources – they are too corrupted and,
therefore, too risky.”
“We will have to refer to police and demand the layoffs of those
guilty in the wrongdoing,” Gatsko concluded.
“Managing the advertising business in capital city is a mess, given
all the responsibilities, accountability and lack of systemic approach,”
Artem Bidenko, head of the City Hall’s advertising department, wrote in a Dec. 22 blog.
The amount of unregistered ads on the streets grows, pricing remains
non-transparent, while there’s also no registry of the ads, Bidenko lamented.
Kyiv is the biggest advertising market in the nation. When it comes to
ads on public transportation, the capital city contributes to 80 percent of the
overall revenue in this sector of Hr 70 million. In general, Ukraine’s advertising market shrank to Hr 9 billion last year, down by 20 percent, while the
All-Ukrainian Advertising Coalition expects it to remain the same in 2015.
This year, the Kyiv budget expects to have Hr 22.2
billion of revenue and spend Hr 20.3 billion. City has two outstanding
eurobonds maturing in 2015 and 2016 with the overall amount of borrowing in
them at $550 million. Both are likely to be restructured.
Kyiv Post associate business editor Ivan Verstyuk can be reached at [email protected].
