KUALA Lumpur City Hall (DBKL) has issued a termination notice to the company it appointed to manage all non-freestanding billboards in the city.

The letter was issued on March 12 as a three-month notice to the company.

Federal Territories Minister Khalid Samad said the contract was given on Sept 19, 2017 to manage all non-freestanding billboards. These are billboards on walls, highway gantries, hoardings, viaducts, bridges, buildings and pillars.

There are 4,850 such billboards in the city.

An example of a wall billboard.

“At the time, DBKL did not have a complete inventory on such billboards and the company offered to take charge.

“The Licensing and Petty Traders Department signed a six-year agreement with Anjung Akar Sdn Bhd, starting Aug 8, 2017 until Aug 7, 2023, to manage and legalise all non-free standing billboards.

“Throughout the period, DBKL agreed to pay a service fee of not more than RM12mil plus RM720,000 in GST (goods and services tax) ,” he revealed.

Khalid said DBKL had struck a lopsided deal that benefitted the company much more.

“There are two kinds of payments, one for billboards located on DBKL properties and another for those on non-DBKL assets.

This billboard on a gantry in Jalan Kuching is located on DBKL property.

“For billboards located on DBKL properties, Anjung Akar will pay RM5,000 per billboard yearly. Anjung Akar will then have the freedom to set the rate to rent the space to advertising agencies. It was reported that the space was rented for up to RM60,000 a year. DBKL is losing out on revenue.

“For billboards located on private properties, DBKL will pay Anjung Akar a percentage of the advertising licence fee throughout the six years. The agreement was for 20% in the first two years, 19% in the second two years and 18% in the last two years,” he added.

Khalid said the company wanted to sue DBKL for terminating the contract.

“We see no problem in terminating the contract as the agreement was made in such a way that gave DBKL the right to end it prematurely,” he said.

It is learnt that DBKL will take over the management after the notice period ends on June 11.

With DBKL taking over the management of non-freestanding billboards fully, the local government is set to increase its revenue.

Anjung Akar paid RM5,000 a year to rent this space on a viaduct from DBKL.

A source said DBKL could increase its revenue from non-free standing billboards on its assets by between four and 12 times.

“DBKL currently only gets a fixed rate from the management company for the billboards.

“When DBKL is dealing directly with media agencies or companies, DBKL can set a rate of anything from RM20,000 to RM60,000 per billboard annually.

“For billboards located on non-DBKL assets, DBKL also stands to save the percentage of its licence fee that was agreed to be apportioned to Anjung Akar.

“DBKL Licencing and Petty Traders Department will take over the management of the non-free standing billboards, just like how they did before it was handed to Anjung Akar,” said the source, who did not have the figure for billboards located on DBKL assets.

The information technology company came under scrutiny last year over public allegations that it was handpicked by a former minister for the contract.

It was reported by a news portal that Anjung Akar director Kamal Fikri Kamal Suhaimi defended the company, which was established in 2012, stating they “had no links” and went through proper channels by bidding for the contract through a tender process.

Kamal had said that up to 80% of billboards were illegally put up between 2007 and 2017.

He said that since they had the data to prove it, they saw the opportunity to offer their services to DBKL.

The news portal also ran a search on the Companies Commission of Malaysia website, which revealed the company’s nature of business as “retailing of computer hardware and software, research and development of software, providing IT consultancy and system integration services.”

It is learnt that DBKL had also privatised the management of free-standing billboards located on areas belonging to the Federal Territories Land and Mines Office, to Yayasan Wilayah Persekutuan.

These contracts are still in force but the details were not available at press time.

DBKL is managing free-standing billboards on its properties.

As at press time, Anjung Akar has not replied to StarMetro’s request for comments.