The other side of advertisements: who is behind the business with billboards in Macedonia?

Recently there has been realignment of forces and increasing the competition in this business

author: Vlatko Stojanovski

24 hours a day, seven days a week, billboards conquer every passer-by. When a man approaches it, he simply cannot ignore it because of its size and conspicuousness, and therefore the message it conveys, unlike the propaganda messages on television and the new media, which can be stopped by a single button. Given their density and distribution, walking is nearly impossible, so as people driving without constantly coming across billboards that literally poke from all sides. The capital and the country are flooded with these boards that promote various groups and individuals for the appropriate fee to the agency that manages them.

Out of home advertising is becoming more attractive in situations where advertising of the traditional media is not available for everyone, because it costs more. Also, because of some of their comparative advantages in terms of advertising online. Private companies and political parties are increasingly turning to this type of “out of home” advertising. According to the adepts in this business, last year companies that operate in this sector generated a turnover of about 4 million Euros, with this figure tending to increase year after year. The largest percentage of this amount of money is in the capital ,Skopje, while the rest in other towns in Macedonia, as well as the inter-city spaces and border crossings, where so-called big boards are set up. Recently, there has been realignment of forces and increasing the competition in this business, primarily in Skopje, where now mainly four marketing companies act.

One of them has made its way in this market and distributed their presence on the territory of Macedonia. Incidentally, the ownership and management of this company is in close relation with the minister and secretary general of one of the largest ruling parties.

GREAT INTEREST, FEW OFFERS

The Mayor of Skopje Koce Trajanovski, when first a candidate for mayor of the capital, in the election program for the term 2009 to 2013, promised that if elected, to bring the procedure to regulate the placement of billboards in public spaces. Then, he guaranteed that the space for this purpose will be issued in a transparent way.

– We know that by opening this issue we will come to many pressures, because in this business there is a lot of money, but we must try to solve the problem with billboards – spoke Trajanovski over 4 years ago.

Soon after, precisely in 2010, Skopje City Council adopted a Decision on establishing the need for setting urban equipment, as well as the conditions, manner and procedure for granting approval for setting up urban equipment. Two years later, the Council adopted the Program on setting urban equipment – billboards in the area of Skopje for the period from 2012 to 2027. In this program, published in the Official Gazette of the City of Skopje number 9/2012, zones are determined and boundaries are defined where billboards must be placed. Also, this document prescribes the type and shape of the billboards that must be unified, and provides the procedure through which locations are given for their placement.

Based on this Program, in late 2012 the City announced a public call for bids for getting the total of four packages on locations for placement of billboards in the city. The division of the four packages automatically meant suppressing the positions of the two marketing companies, which were then concessionaires of the city: “Lazov Group” and “Accent Media”. For “Lazov Group”, which, according to data from the Central Registry, was founded in 1996 by Vladimir Lazov, bankruptcy procedure was opened in January. So, the bankruptcy manager Vesna Spirkovska actually occurs as an authorized representative of the company.

As for “Accent Media”, formed back in 1995, as announced on its web site, it is part of the Austrian company of eight decades experience in this area – “Epamedia”. Its daughter companies also work in Bulgaria, Romania, Slovakia, Hungary, Czech Republic and Croatia.

After the first public announcement, three companies signed contracts with the city to place billboards: “Accent Media”, “Kalaplakat” and “Screen Media”. As four firms were required, there was a need for second announcement so a contract was signed was “Media-S”. Thus, official data show that “Kalaplakat” was established as a company for trade and services in 2006. Its founder is certain Krume Apostolov, who is also the manager of the company. Regarding “Media-S”, it was founded in 2001. Its current condition states that Slavko Sekulov is the founder, while Filip Lazov occurs as a manager.

Namely, the contracts the companies signed with the City, as the mayor said after signing them, predict that in the next 15 years each of them will manage one of the four packages of 200 locations for placement of billboards. Moreover, each packet includes 62 so-called citylights, as well as 13 panels. And for that they have to pay 302,000 Euros to the City each year.

This means that the starting price for auction was said at random for a step of 2,000 Euros, envisaged in the public announcement as necessary first minimum bidding. In the announcement it was certain that in the battle for locations for billboards, companies were entitled to participate with at least two years of operational experience and no debts to the city.

Practically, none of the companies had a reason to submit a higher bid than they had to. In the first announcement three companies competed for 4 packages, so they were allowed to compete for any of them, but eventually one company could not get more than one package. In the second announcement, however, there was still a cleaner situation because only one company applied for one package.

From the responses we received from the City of Skopje, in writing, it appears that the four selected companies were not the only interested in one of the four packages, but most of them had given up the intention to bid on the first listing. Some of them did not even submit offers that were eligible for public auction.

-In the first public announcement, documentation for public notice for granting locations for placement of billboards in the City of Skopje was given to a total of 12 legal entities, and 5 of them submitted bids. After checking the completeness and validity of the offer and after its evaluation, it was determined that a total of 3 of the legal entities that had submitted bids were eligible to participate in the public bidding – they informed us from the City of Skopje. From there they add that all companies for now respect the obligations of the four contracts between the City and the companies, as well as the standards from the Program on setting urban equipment – billboards in the area of Skopje for the period from 2012 to 2027.

ACTIVE IN WEST MACEDONIA

In this research the company “Screen Media” has a special place, because its owner and manager, Elmedin Ademi, is nephew of the new Minister of Education, Abdulakim Ademi.

The Minister of Education is also general secretary of the second largest coalition participant in the government led by VMRO-DPMNE – DUI. The documents from the Central Registry confirm that the formation of the company in mid-2008, with paid-in capital of 100,000 Euros, coincides with the return of DUI after a two-year stay in opposition. Initially, the company was formed by three founders, but in the meantime there was a change in the ownership structure and today it is owned by one person.

In addition, Abdulakim Ademi was a member of the Macedonian Parliament from 2002 to 2006. When DUI again became part of the executive power in 2008, Ademi was elected deputy PM in charge of the implementation of the Framework Agreement, and the following year he became the second man in his party after the Congress in 2009 when he was elected general secretary, a function which he was re-elected in this year’s party congress, too. Meanwhile, he was Minister of Environment until last parliamentary elections, after which he was elected Minister of Education.

The company of his 26-year-old nephew, “Screen Media”, does not work only in Skopje, but is present in other parts of the country. Taking into consideration the fact that the main business is in the metropolis, billboards in other towns and intercity areas, experts say, are commonly used to improve the offer to the client concerning the capital. However, neither the locations in other major cities in Macedonia are negligible. According to the data by the company itself, published on its website, it has its own locations in Western Macedonia, Gostivar, Tetovo, Kicevo, Struga. Most of these municipalities are currently under local authority of DUI.

In the last local elections in 2013, the Vice President of DUI, Nevzat Bejta became Mayor of Gostivar. As they said from the municipality, more than a month ago “Screen Media” obtained the right to manage the billboards and the obligation to build them itself.

– Five of total 20 billboards have already been built, so there are 15 remaining – they said from the mayor’s office, noting that there had been interest from another company, but it did not go to the end.

Municipality of Tetovo, led by another vice-president of DUI – Teuta Arifi, based on a decision of the council, has contracts for two out of home advertising companies, one of which is “Screen Media.” But they say they were concluded during the previous mayor of DPA, Sadi Bexheti.

– Out of home advertising in the municipality of Tetovo is regulated with a decision by the municipal council regarding the manner, conditions and criteria for setting up billboards in the area of ​​the municipality – they emphasized electronically from this municipality.

After we asked the Mayor of Kicevo, Fatmir Dehari, how this subject is regulated in the municipality, he asked us the question to be sent by email. But then we did not get a response.

Asked whether he sees something contentious and problematic in the fact that this company has contracts with several municipalities, and some of them are led by his party colleagues, the Minister of Education and Secretary General of DUI, Ademi, wrote via text message:

– Almost all contracts the company has with the municipalities are from the period when DUI did not manage these municipalities.

ALSO PRESENT IN STIP, VELES, OHRID…

“Screen Media” is also present in other parts of the country, i.e. municipalities mostly under local authority of the major government partner, VMRO-DPMNE. Some are in Stip, Veles, Ohrid…

– In Stip many companies have their own billboards, there is competition – said the mayor of VMRO-DPMNE, Ilco Zahariev.

“Screen Media” won the tender of Veles municipality for managing billboards in the town in 2010, though, as local media wrote then, other company, that had previously managed dozens of billboards in the town, submitted a lower bid. From this municipality, where in the meantime there is a new mayor, also from VMRO-DPMNE, they said that the contract with “Screen Media” had already expired, so the council decided to soon announce a new public announcement.

– The new concessionaire will be the one that wins the bidding – said the current mayor Slavco Chadiev.

The company also cooperated with the Municipality of Ohrid, at a time when Aleksandar Petreski of SDSM was the mayor, whose second term ended last year.

The Public Procurement Bureau shows that the Municipality of Ohrid in 2011 signed a contract with “Screen Media” worth 2 million denars (over 32,000 Euros). Under the agreement, the municipality acquired three passenger motor vehicles from this company. The criterion for selection was not the lowest, but economically most favorable bid. That is, the price was 50 points, while the remaining 50 points were warranty and technical characteristics of the vehicles and the delivery date. Thus, according to publicly available data, “Screen Media” obtained the public procurement as one of the three bidders submitted lower price for about half million denars.

From the Cabinet of the current Ohrid Mayor Nikola Bakracheski they explain that in the period of his predecessor billboards were set virtually anywhere, without taking proper documentation. Therefore, they point out, the municipal council decided to record all billboards and ordered the companies that had set them to remove them.

– Then, you need to adopt a plan for setting up about 40 billboards in the municipality, but not in the old town. They will need to be standardized and lighted. Then, there will be a public announcement to choose a company that will set up and manage them, and whether it will be one or more, it is not known yet – they say from the municipality.

With regard to public procurement of vehicles worth 2 million denars, they verbally said it was about three “Ford” vehicles, invoiced at 600,000 denars.

– “Screen Media” is suing the municipality claiming 3 million denars. There is no documentation what this amount refers to – explain from the Municipality of Ohrid, adding that once another marketing agency closed the debt to the municipality through compensation, also with motor vehicles, and not even a tender was announced.

In this regard, the Ministry of Internal Affairs in 2011 said it filed criminal charges against the manager of “Screen Media” Elmedin Ademi, for usurpation of real estate and grand theft. He, according to the Ministry of Interior, on 15 locations in Ohrid usurped public area by placing billboards without approval of the Municipality and unauthorizedly connected electricity for lighting billboards. We have information that this case is still being prosecuted.

We did not manage to get in touch with ex mayor Petreski.

COOPERATION WITH OTHER COMPANIES

“Screen Media” has not concluded any agreements on public procurement with other state bodies and institutions, but has cooperated with other marketing agency and has made several such contracts, and that is “Genesis Communications”. The former owner of the company, Petar Arsovski, confirms that they have cooperated with “Screen Media” for a campaign it made for the needs of a state organ.

– We particularly cooperated for billboards in Western Macedonia – he says.

Arsovski meanwhile sold the company formed at the end of 2005, which in 2013 was transformed and renamed into “Tag Communications”. Information from official institutions reveal that the owner and manager of the company whose primary business is marketing, but also deals with trade of goods and transportation of people, is Gazmend Ajdini.

Among other things, “Genesis Communications” concluded agreements with several bodies (Secretariat for Implementation of the Framework Agreement; Foreign Investment Agency; Macedonian Post…). But as they point out in “Screen Media”, they cooperated with them just for the campaign of “Macedonian Post”. Data from the Bureau of Public Procurement show that “Genesis Communications” concluded two agreements with “Macedonian Post” in 2011, one of which was for design and implementation of the marketing campaign, worth 33 million denars, or half a million Euros. The second contract for public procurement between “Genesis Communications” and “Macedonian Post” is an annex or extension of an earlier agreement of almost million denars. In 2010, however, “Genesis” and “Post” concluded an agreement, to which the annex refers, for creating and implementing a campaign, worth 14 million denars.

Just for information, in recent years “Macedonian Post” has been led by DUI personnel. Thus, Rafiz Aliti was CEO during the parliamentary elections in 2011 until this year’s elections, when he was elected MP. His predecessor was Eyup Rustemi.

– We are a business company in the field of out of home advertising, and we cooperate with many companies and customers. We are not close to any party. We see the parties only as potential customers and that is why we have cooperated with them. During political campaigns, on our billboards appear listings from all parties we cooperate with on a purely commercial basis. Our business cannot from any aspect be brought in the context of politics. Working with public and state institutions does not take more than 2 to 3 percent of our work – assures the head of “Screen Media”, Ademi.

In his answer via email he highlights that in the last few years since the beginning of the economic crisis it has been quite difficult, especially as in economic crises budgets for advertising are the first to cut.

– Due to the new rules for out of home advertising in the last year or two we had to make additional investments. We have a total of 400 billboards, megalights and bigboards across Macedonia. As we have no financial capacity to mount on facilities in Skopje, we are beneficiaries of a commercial loan from domestic banks, so you cannot speak of any profit – he concludes.

WORK WITH A PARTY DONOR

In addition, he works in the construction business as co-owner of the construction company “Eurovia” along with his father Xhemaledin Ademi, Abdulakim Ademi’s brother. Specifically, father Ademi is the manager of the technical department, while son Ademi is general manager of the company that deals with high-rise, civil engineering and hydro construction.

According to the official information from the Central Registry, the company was founded in 2010. But young Ademi explains that this company “works as a family company with long experience and long tradition in construction, and it does not work for public and state institutions”.

The information that the company itself has published on its web site show that “Eurovia” has participated in projects with the Ministry of Health and Municipality Karpos, renovation of the Hospital in Cair, or the construction of an administrative building in Karpos. The Ministry of Health in 2010 concluded an agreement for construction activities of the maternity hospital in Cair as part of the package for reconstruction of polyclinics “Idadija”, “Bukurest” and “Jane Sandanski” with the Bulgarian company “GBS Blagoevgrad” worth over 150 million denars.

As for the construction of the administrative building in Karpos, in 2010 this municipality concluded a contract with the Tetovo construction company “AK-Invest”, worth nearly 73 million denars. These companies, that had signed other contracts for public procurement, hired “Eurovia” as a subcontractor on both projects, at a time shortly after the establishment of the company in 2010. The subsidiary of the Bulgarian company in the country had already been liquidated. From “AK Invest”, founded in 2005 by Azbi Nuredini, they did not respond to our question sent by email whether they have hired “Eurovia” for some other project, too.

Additionally, “Eurovia” declared that it had constructed a facility of 1,340 square meters for the needs of the private investor from Tetovo Kjatip Fetai. The same person appears in a report of DUI in municipal elections in 2013, submitted to the State Audit Office, as a party donor with 600,000 denars.

So it appears that people’s money did not flow into the budgets of “Screen Media” and “Eurovia”, at least not directly and immediately, but it is worth noting that the company has worked with other companies that cooperated with government authorities. In a country like Macedonia, where politics and business are joined, it always attracts attention when a company will reach the top in a particular business area, especially if the work of the company, whose founder is the manager in close relation with a senior state official, depends on the contracts it signs with municipalities.

The story was financially supported by CIN SCOOP Macedonia within the NED project “Raising Awareness about Corruption through Investigative Reporting” .

The article originally was published in weekly Fokus on August 14, 2014