Out-of-home advertising on U.S. public transport networks should be boosted by the adoption of a national standard for audience measurement, as Barnaby Page reports.
A study conducted by Canadian audience research firm Peoplecount for the Transportation Research Board, a U.S. nonprofit body, found that advertising agencies want better metrics and more precise targeting for their campaigns. It covered ads inside and outside buses and trains as well as at stations, and provided a raft of recommendations for a national metrics scheme.
And now the Traffic Audit Bureau (TAB) has been appointed to co-ordinate such a scheme. It will be based on the Out of Home Ratings system from TAB, previously known as Eyes On, which measures not only the number of people potentially exposed to each advertising site, but also the probability that they will actually notice an ad – determined by applying a Visibility Adjustment Index (VAI) calculated from eye-tracking tests.
Data from top ten markets is expected to be available shortly, with others to follow.
Currently, transit inventory is sold for around $1bn annually, delivering about half of that sum to transit operators. But although media buyers do “choose transit advertising for the mass reach, lack of traditional outdoor in the area and ability to target geographically or demographically”, the Peoplecount researchers found that they are are unhappy with the accuracy of audience measurement, desire better demographic and geographic targeting abilities, and in particular would like to see Out of Home Ratings used.
With improved audience metrics, preferably compatible with existing media planning software such as that from Arbitron, IMS, Nielsen or Telmar so that transit can easily be compared with other media in general and alternative out-of-home media in particular, planners would be likely to recommend more use of transit media, they said.
They just won’t listen
Troublingly, however, sellers of transit media did not appear to understand planners’ problems. They believed that “lack of knowledge or familiarity with the medium” were the main obstacles to developing business, and actively preferred not to allow planners to select particular locations for their ads, wanting instead to make mass sales across a whole transit system.
And, the report warned, the data that is currently supplied may often be unreliable: “Because there is no prevailing method many sales organisations resort to ‘guesstimating’ audience exposures for premium route vehicles such as historic vehicles, tourist lines, etc. Impressions are often extrapolated from circulation data at fixed points on the route, or other available sources. Unfortunately none of these methods follow an accepted protocol and accuracy varies widely.
“The outdoor advertising industry (through TAB) has been rigorous about audit compliance and requires each display to be certified. There is no comparable audience measurement certification for bus or rail media, so even if the data are from independent third-party sources, it appears to be self- reported, thereby diminishing its value as an accepted currency.”
The implementation of the new national standard should address that problem. But it also emerges from the Peoplecount report that producing reliable transit metrics is no small task.
The researchers identified the problems faced by schemes in a number of other countries – Australia, Finland, Ireland, the Netherlands, Spain, Switzerland and the UK.
The process of gathering accurate, usable data is a “huge challenge”, they concluded, and particular attention needs to be given to understanding the paths that passengers take through a transit system in order to assess the value of individual advertising locations. Like the U.S. media planners, the foreign audience measurement schemes also recognised the importance of developing a system that can compare transit with other out-of-home media.
It will be important to get as many transit systems as possible to participate in the new metrics programme as it is rolled out over a one-to-three-year period, according to the report’s authors, who suggested that when appointing sales houses the transit operators should stipulate that the new audience measurement system must be used.
Digitally complicated
As well as the Out of Home Audience Ratings which will form the basis of the new metrics, the measurement guidelines from the Digital Place-Based Advertising Association (DPAA) were also recognised as appropriate for “digital displays in closed systems such as bus and train interiors and bus or train stations”, although the researchers noted that the guidelines don’t specify in detail how measurements should be made.
But where digital signage is concerned, measurement may be even more complicated than for static signage, although that may also promote its benefits.
The researchers pointed out that not only would the duration of each advertisement in a playlist have to be considered, but also – in the case of displays visible from outside the vehicle – both its average speed and that of passing cars, factors affecting the duration of a screen’s actual visibility. “Given the number of potential variables and the relative rarity of this type of digital signage, it would be best to customise these calculations for each particular transit system’s exterior mobile digital signage installations,” the researchers advised.
They also suggested that although most “basic in-station posters” could be treated as identical within a given station, more differentiation might be necessary at “very large and complex stations”. This implies that giant concourse screens at major terminals, for example, could require individual measurement – almost certainly underlining their attention-grabbing capability.
High-profile digital installations covered by the new metrics are likely to include CBS Outdoor’s displays on the Atlanta subway, Titan’s in Philadelphia, and the bus-borne digital signage that Titan operates in Chicago – where the same company is now also adding screens to subway stations under a new contract – as well as station screens from a range of major outdoor players.
www.dp-aa.org
www.eyesonratings.com
the Peoplecount reportShare this post
Tuesday, February 12, 2013
Something all of OOH should work toward | From ScreenMediaMag.com: New metrics will bring transit into advertising mainstream
Friday, February 08, 2013
18 Days to Go till #DSE2013! See you there for #DSE360! | From DailyDOOH » Digital Signage 360: Bing Kimpo
Gail Chiasson, North American Editor
If you are thinking of expanding your business beyond the North American borders, or even if you simply are interested in what is happening in Digital Out-of-Home worldwide, there is one session you cannot miss on February 26, the pre-exhibit educational day of #dse360.
For the second year, DSE and DailyDOOH have joined in creating a half-day international conference with the goal of providing technology providers, systems integrators, network operators, advertising agency executives and others an overview of the opportunities, challenges and achievements in the use of digital signage and digital out-of-home networks around the world.
The event, which this year will cover Eastern Europe, Asia/Pacific and Latin America – with speakers representing Poland, Japan, Australia, the Philippines and Brazil – will provide an ideal opportunity for anyone looking to network and do business outside their current region.
One of the speakers that we re keen to hear is Bing Kimpo, CEO, Bing Kimpo Medis/Communications. Kimpo has worked in and around media and communications for 18 years, in broadcasting, advertising, public relations and now out-of-home.
He has deployed, managed and sold ads on networks in transit, office and retail environments. Kimpo now also consults for foreign companies entering the Philippine market in the mobile and OOH spaces. He is a founding director of the Outdoor Media Advocacy Group, and was previously on the board of the Internet and Mobile Marketing Association of the Philippines. He has also been active the Digital Signage World Asia conferences.
“Asia remains on the radar for business,” Kimpo tells us. “While China and India continue to be the obvious targets, the region’s emerging markets have become increasingly attractive as well. My talk will focus on Southeast Asia.
“These emerging markets represent new opportunities: a burgeoning middle-class consumer segment, a growing OOH advertising sector, and an openness to digital. Yet, along with the opportunities, there certainly are obstacles.”
Kimpo’s talk will offer a snapshot of where the emerging markets in Asia are vis a vis DOOH, with insights culled from media owners, agencies, vendors and advertisers. And we’re sure that he’ll be happy to answer any and all questions.
To hear Kimpo and the other speakers during this half-day event (9 a.m. – 12:30 p.m.) titled Digital Signage 360: A Global Perspective, you can register here.
This entry was posted on Thursday, February 7th, 2013 at 14:30 @646 and is filed under DailyDOOH Update. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
Tuesday, February 05, 2013
See you at DSE360 Global Perspective #dse2013
Adrian J Cotterill, Editor-in-Chief
For the second year, Digital Signage Expo and DailyDOOH have joined in creating an unprecedented half-day international conference with the goal of providing technology providers, systems integrators, network operators, advertising agency executives and others an overview of the opportunities, challenges and achievements in the use of digital signage and digital out-of-home networks around the world.
The 2013 event covers Eastern Europe, Asia/Pacific and Latin America (with speakers representing Poland, Japan, Australia, the Philippines and Brazil), will provide an ideal opportunity for anyone looking to network and do business outside their current region.
Schedule:
- 8:00am Registration
- 9:00am Welcome
- 9:30am The Key Digital Signage Players in Japan and Their Thoughts on the Market
- 10:15am Obstacles and Opportunities: An Overview of Emerging Asian DOOH Markets
- 10:45am Opportunity and Risk — Digital Signage Market in Poland and Other Central East Europe Countries
- 11:30am Brazil and Latin America DOOH: Opportunities to Grow UP!!!
- 12:00pm ONLINE or REAL TIME — The Challenges of Managing Over 20,000 Screens in Different Environments and With Different Content
Prospective attendees can register here
Celebrating its 10th anniversary in 2013, DSE has grown to attract attendees from not only all 50 states but also from more than 60 foreign countries. Over the years, DSE has increasingly become a meeting place for the international community to see and display new technology and share the knowledge necessary for business success.
This entry was posted on Sunday, February 3rd, 2013 at 18:04 @794 and is filed under DailyDOOH Update. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
Sunday, January 13, 2013
6 Timely Ideas For Innovating A Pretty Dysfunctional Agency Pitch And Selection Process - Forbes
The way agency search is practiced now is too slow for a marketing world that runs at the speed of light, and it is too expensive for companies (and agencies) that need to prevent harmful waste. It can take 5 or 6 months, or even a year, at the cost of diverted attention from the company’s business, and the expense significant executive time. Instead, with an improved protocol, a well managed agency search can be concluded in five to six weeks, without hurting the quality of results. In fact, a revised process will lead to a more informed pick, and a stable, long-term relationship with the agency.
Part of the problem with today’s commonly practiced agency search process is that agencies and marketers have different objectives from the get-go. Marketers are looking for a long-term relationship with an agency. Agencies, on the other hand, are more mercenary: initially, they are looking for a transaction, not a deep relationship. They are simply looking to win the pitch.
The traditional approach to selecting an agency that has been practiced by pitch consultants since the early 1970’s, is completely out-of-date. It is complex and selection is determined by a superficial context. This leads to growing instability in client/agency relationships, and accelerates turnover in agency rosters and eventually hurts brands and their equities. Relationships, which used to last 15 or 20 years now break down in less than 3 years, on average.
A contemporary process needs to be streamlined and optimize interaction between marketers and the agencies under consideration. Here are areas of improvement that I’ve drawn from my personal experience in agency search over the last 30 years:
1. Do Away With The RFP: Most consultants start by contacting 15 or 20 agencies and sending them an RFP. However, RFPs are generic and provide very little useful information. So the first two or three months of the search process, perhaps more, are wasted sorting through redundant responses from the agencies. Instead, an independent consultant who has in-depth knowledge of agencies and their capabilities should be able to shortlist the best 4 or 5 contenders, depending on what the marketer’s brief is.
2. Workshops Instead Of A “Pitch”: The traditional agency search process is more of a “beauty contest” that revolves around the “pitch meeting.” The risk in these beauty contests is that agencies are much better at them than marketers. Agencies pitch all the time and are very good at “presenting” and showmanship. Instead, facilitating a number of workshops with each of the contenders gives the marketer an opportunity to evaluate how well they develop strategy and creative work, how they think, their ability to work fast, and just how passionate the agency team is.
Unlike a traditional pitch process, this approach mirrors exactly how marketers and agencies work in real life, and depicts a much more unvarnished view of the contenting agencies, their strengths and weaknesses.
3. Hire An Agency’s Future, Not Its Past: And that future, while somewhat informed by the past, is more likely to be a reflection of the agency’s vision, and its willingness to embrace what’s coming rather than preserve what’s been. Did the agency adjust to the new communications model, which shifted away from interruptive messages, and did it adopt technologies and platforms that make listening more important than messaging?
4. Hire Their Criteria For Hiring People: Talent rules. Nothing is more important than people. You certainly want collaborative people working on your business, but you may also want to know what qualities the agency looks for when hiring – curiosity? courage? optimism? persistence?
5. Hire For All The Screens: Advertising is no longer about just the 30-second spots, although many agencies are still stuck in the old model. One of the most critical things to find out during the workshops is their adaptability with technology, developing apps and utilities, digital, mobile, social, branded content, building platforms.
6. Hire For Culture And Ethics: Marketers often look at culture in terms of the agency’s creative standards. However, its core values, work ethic, and commitment to partnership will foretell the kind of relationship you are likely to have.
Marketing is one of the biggest expenses for most companies, and hiring the right agency is one of the most important decisions a CMO can make. It is time to innovate a failing agency selection process, now in its fifth decade, and adapt it to marketers’ needs in the 21st Century.
Avi Dan is the founder of Avidan Strategies, a marketing consulting firm that specializes in business and marketing advice, agency search, compensation, and advertising strategy. He spent 30 years in senior account management and business development positions with leading global agencies.
I tend to agree. The whole pitching process now seems hard put to keep up with the marketing communications landscape of today.
Friday, January 11, 2013
How Red Robin Bought Priceless PR for $11.50 | Adweek
It doesn't cost much for a brand to polish its image and generate lots of positive media attention. In fact, $11.50 will get you a ton of it. That's the amount Charles, the manager of a Red Robin restaurant in Apex, N.C., recently comped a very pregnant customer (she was actually overdue) when she stopped in for a meal with her husband and 2-year-old son. Charles deducted that amount and added the note "MOM 2 BEE GOOD LUC" to the bill. The atrocious grammar and spelling just enhance the "Awww" factor. Charles tells
Consumerist that the way to make customers happy is to "listen to them, and make sure they leave feeling appreciated and valued. If our guests know we welcome their feedback, I think they'll talk with us and speak up … to say they had a positive and satisfying experience with us, and hopefully also to say they'll be back again soon." All the attention seems a bit overdone, but in these cynical times, when restaurant workers most often generate headlines for defiling salads and sandwiches, Charles's tale resonates, especially since it was a genuinely kind act, not some rah-rah commercial. Maybe the woman will name the kid "Robin." Works for a girl or boy. Bet she'd have a few more free meals coming her way.
Wednesday, January 02, 2013
Sunday, December 23, 2012
The Most Unforgettable Ad Campaigns Of 2012 - Forbes
What do caring moms, extreme skydivers and the Three Little Pigs have in common? They’re all the subjects of 2012’s most unforgettable advertising campaigns. Beyond that, though, they epitomize the new era of advertising: authentic, transcendent, storytelling works of art that get people talking and become part of culture.
“The holy grail for advertising today is the same as it’s always been: to rise above the fray of soulless sales pitches and become part of culture. Not just being recalled or remembered but hitting a nerve and becoming both share-worthy and meaningful,” says William Gelner, executive creative director at 180 LA. “The best brands get that. They aim higher.”
Heath Rudduck, chief creative officer at Campbell Mithun, says an ad that tells a story in an authentic and compelling way is more likely to grab your attention and stay with you for a long time. “I don’t think a brand can exist today without some degree of empathy. Timing is one thing, but unless you strike a chord emotionally with the audience, it falls on deaf ears and cold hearts.”
The Most Unforgettable Ad Campaigns Of 2012
Procter & Gamble's "Best Job"
Watch “Best Job."
Take Procter & Gamble’s “Best Job.” The two-minute spot—produced and created by Wieden & Kennedy, a Portland, Ore.-based agency, and director Alejandro González Iñárritu—was the cornerstone of the “Thank You, Mom” campaign. The ad promoted P&G’s Olympic sponsorship by celebrating the dedicated mothers who raise the athletes. It ran online, on TV, and in print, and recently won the Emmy for the best primetime commercial.
“This was a beautiful piece of work that really gave me a visceral reaction,” Rudduck says. “This spot was born of a truth and it was delivered in a wonderful way.”
Gelner agrees. He says he’s been a fan of this campaign since it started because it beautifully acknowledges the world’s most thankless job: being a mom of an Olympic athlete.
“Long after the floor exercise is over, the applause dies down and everyone has gone home, moms are the ones there left to pick up the pieces and provide console and comfort,” Gelner adds. “While authentic and noble, in the wrong hands this could have been schmaltzy. Alejandro Gonzalez Inarritu handled it masterfully. The moments felt authentic and real, versus overly sentimental or ham fisted.”
Jez Frampton, Interbrand’s Global Chief Executive Officer, says P&G struck a deeply emotional chord with this campaign. “It not only successfully appealed to the mom demographic, but by depicting the small, intimate moments of raising a child striving for Olympic success, P&G also tapped the hearts of moms and many other consumers worldwide.”
For an event that, at its core, is about competition, this campaign evoked a sense of global unity and, as such, resonated with consumers all over the world, Frampton says.
“The campaign helped to humanize a seemingly larger-than-life and commercial event. As P&G has long stood for providing comfort, wellness, and the means necessary to thrive and succeed, the campaign was credibly tied into P&G’s distinct brand DNA.”
In Pictures: The Most Unforgettable Ads Campaigns of 2012
Susan Credle, chief creative officer at ad agency Leo Burnett, says the most memorable spots don’t just make us laugh or cry; they change a conversation.
A perfect example of this is The Guardian’s “Three Little Pigs.”
In February, the British newspaper launched this creative and compelling spot that showcases their multimedia credentials and “open journalism” philosophy. The 120-second ad follows the developing story of the Three Little Pigs, and visualizes how the paper would cover the story online and in print.
“Much has been said about the death of the newspaper,” Gelner says. “This epic film challenges that notion by putting world-class journalism and objective reporting at the center of the conversation. Regardless of where that conversation is taking place: on a tablet, in social media or printed in a good old-fashioned newspaper. It’s classic storytelling at its best.”
The TV commercial, which was developed by ad agency Bartle Bogle Hegarty (BBH) and directed by Ringan Ledwidge, did a tremendous job of making newspapers feel contemporary and relevant, Rudduck says. “Will The Guardian end up in purely digital form one day? Yes, but they still have to shift paper today and this is a spot that makes me want to get ink on my fingers.”
Wednesday, December 19, 2012
INSIGHT-The booming Philippines' missing link - foreigner investors | Reuters
INSIGHT-The booming Philippines' missing link - foreigner investors
Related News
- U.S. military to boost Philippines presence; China tells army to be prepared
Wed, Dec 12 2012- Typhoon kills at least 283, hundreds missing, in Philippines
Wed, Dec 5 2012- Vietnam condemns China's sea claims as "serious violation"
Tue, Dec 4 2012- ASEAN chief voices alarm at China plan to board ships in disputed waters
Fri, Nov 30 2012- Philippine economy shines in third quarter, highlights Southeast Asia resilience
Wed, Nov 28 2012
By Rosemarie Francisco and Stuart Grudgings
MANILA | Tue Dec 18, 2012 4:00pm EST
Dec 19 (Reuters) - The gathering had the air of a post-mortem. About 100 executives and government officials listened quietly as Guillermo Luz poked holes in the Philippines' fairytale economic revival.MANILA
Luz, head of the Philippines' National Competitiveness Council, projected a deck of slides onto two pull-down screens that showed the fast-growing Philippine economy slipping in the World's Bank's "Ease of Doing Business" index to 138 out of 185 countries, near Tajikistan and Sudan.
"It's a lousy neighbourhood," he said of the two-notch fall this year. "I do not want to live with that ranking."
As the Philippines gallops ahead with the strongest economic growth in Southeast Asia and one of the world's best-performing stock markets, its shortcomings are being laid bare, including stubborn problems that have already started to undermine its economic renaissance.
While foreign funds have poured into Philippine assets this year, driving the main stock index up around 30 percent to a succession of record highs and lifting the peso currency about 7 percent, foreign direct investment (FDI) remains embarrassingly low.
Total FDI is on course to hit around $1.5 billion this year -- about half its level in 2007 and less than the average $1.7 billion received every month in remittances from Filipinos overseas.
That is only about 3 percent of the total that flowed last year to a group of five peer economies including the Philippines in the 10-member Association of Southeast Asian Nations (ASEAN).
In his presentation in Manila's Makati business district, Luz highlighted the Philippines' lowly ranking in a range of categories, from "paying taxes" (143rd), to "starting a business" (161st) and "resolving insolvency" (165th).
Since coming to power in 2010, President Benigno Aquino has made headway against long-standing problems of corruption, shaky public finances and low infrastructure investment that earned the country the unwanted sobriquet of the "sick man" of Asia.
But he has yet to show his government can translate the torrent of hot money and improved market confidence that is also fuelling a property boom into real gains such as an expansion of higher-paying jobs and better transport links.
Calls by congressional leaders to loosen constitutional restrictions on foreign ownership have met with a lukewarm response from Aquino, a scion of an elite family whose mother, democracy icon Corazon Aquino, passed the 1987 constitution as president.
"I do not believe that foreigners would be that foolish to come here and put their money in business," Juan Ponce Enrile, the Senate president who is calling for the constitution to be revised, told Reuters. "They are at the mercy of local people who are not quite familiar to them. That is to me the reason why we lag in investment attractiveness in Asia."
"SALESMAN IN CHIEF"
The absence of FDI is a missing link that raises doubts over how much has really changed in the nation of 96 million people, where many an investor has been stung by copious red tape, unpredictable policymaking and graft.
Aquino has vowed to change the country's tarnished reputation among foreign investors, billing himself as the country's "salesman in chief". But to do so he needs to tackle vested business interests who benefit from a protected domestic market. So far, there are few signs he is doing so.
The constitution and current rules allow foreign investors to own no more than 40 percent in most industries and bars foreigners entirely in areas such as media and the practice of licensed professions such as engineering, law and medicine.
From 2000 to 2011, net FDI to the Philippines totalled $18.9 billion, according to United Nations Conference on Trade and Development, less than a third of what Singapore attracted in 2011 alone. As a proportion of the economy, the Philippines' net FDI stood at 0.6 percent last year, compared with 2.2 percent in Indonesia and 6.2 percent in Vietnam.
Strong foreign investment has been a vital ingredient in the rise of better-off Asian neighbours like Malaysia and Thailand, boosting job creation and deepening technological capabilities.
Foreign executives here are quick to complain there has been little concrete improvement on the ground, despite a surge of money into financial markets and credit rating upgrades on the back of improving fiscal health and lower borrowing costs.
"For me it's extremely frustrating," said Hubert D'Aboville, former head of the European Chamber of Commerce.
"We should welcome foreign investment, giving them the majority of 51 percent or 100 percent. What is important is to create jobs. We are not creating jobs."
EXODUS OF WORKERS
The Philippines has among the highest jobless rates in Southeast Asia at around 7 percent, helping to fuel an exodus of about 10 million Filipino workers in total that has yet to reverse course or even slow significantly.
Officials close to Aquino say he recognises the need to attract more foreign investment, but is wary of broaching a reform of the constitution that could open up a complex, messy and energy-sapping political process.
"I don't think it's going to be touched for now," Budget Secretary Florencio Abad, who is also vice president of Aquino's party and one of his close advisers, told Reuters.
"You create another uncertainty. Investments are coming in anyway, predominantly by local guys."
Combined investment by the public and private sector grew an annual 7.9 percent in the first nine months against just 1.1 percent a year earlier, with more than half made up of investments in machinery and equipment.
While policy transparency is widely seen as improving under Aquino, the Philippines' volatile political and legal systems regularly throw up unpleasant surprises for foreigners.
Aquino's government has halted new mining projects, stalling development of an estimated $850 billion in mineral reserves, until Congress approves a mining tax reform -- a vote that is unlikely to take place before May 2013 mid-term elections.
In October, Manila added to restrictions on ownership of real estate, lending firms and professions.
Meanwhile, the Securities and Exchange Commission is looking at expanding the 40 percent foreign ownership limit to apply to all classes of shares in a company, rather than just common or voting shares, following a Supreme Court ruling last year that telecoms firm PLDT had breached the cap.
"The Philippines will be shooting itself in the foot because it will severely restrict the available shares for foreigners," said Francis Ed Lim, managing partner of the Accra law firm and a former head of the stock exchange.
TWO PHILIPPINES
While service sectors such as call centres, retail and tourism are growing strongly, the manufacturing sector - an engine of development in countries like Vietnam and Thailand - struggles to compete with neighbours and attract investment.
Ford Motor Co announced in June it was closing its Philippine production factory, citing an inadequate supply network and a lack of economies of scale.
Foreign executives here tell a tale of two Philippines. One is the country's special export zones, where companies can set up wholly owned units easily and receive incentives and efficient services as long as they ship their output abroad.
Total investments by local and foreign firms in economic zones totalled nearly 660 billion pesos ($16 billion) by the end of 2011, more than doubling since Aquino took office in 2010.
The other Philippines is encountered when companies try to tap the domestic market, running a gauntlet of heavy bureaucracy, local government corruption and sometimes troublesome partnerships with Filipino firms.
Companies have to go through 16 separate procedures to start a business in the Philippines, compared with three in Singapore and nine in Indonesia, according to the World Bank report.
Japanese firms have rekindled their long-dormant interest in the Philippines this year, prompted by rising wages in China and Beijing's territorial dispute with Japan. Still, a potential flood of money has been slowed by ownership limits and other restrictions, said Takashi Ishigami, president of Japanese trading house Marubeni Corp in the Philippines.
Marubeni is teaming up with a local firm to bid for a $1 billion railway project, among at least eight major Public-Private Partnerships (PPPs) that make up Aquino's flagship plan to improve infrastructure.
But Ishigami said Marubeni was only supplying equipment as part of the bid, and had been deterred from taking an operational role by the government's refusal to guarantee rail fares. That shortcoming would likely deter Japanese firms from bidding for other PPPs, he said.
"The Filipino PPP is far away from our standard."
Related Quotes and News
CompanyPriceRelated News
- Tweet this
- Link this
- Share this
- Digg this
- Reprints
More From Reuters
Videos From Reuters
From Around the Web
BOOK OF THE WEEK: City of Scoundrels (The Financialist)
If You Have Gmail... You Must Have This (The Unofficial Apple Weblog)
We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/Comments (0)Be the first to comment on reuters.com.Add yours using the box above.
Palace OKs proposed gov’t takeover of MRT-3 | Inquirer Business
Palace OKs proposed gov’t takeover of MRT-3
By Niña P. Calleja
Philippine Daily Inquirer1:38 am | Wednesday, December 19th, 2012 Posted by clopez-->President Aquino has approved the Department of Transportation and Communications’ plan to take over the Metro Rail Transit Line 3, which was estimated to cost the government roughly $1 billion.
“It was approved yesterday (Monday) by the President and consented by the concerned Cabinet secretaries present in the meeting,” Transportation Secretary Jose Emilio Abaya said in a briefing on Tuesday.
Abaya said the President and the members of his Cabinet discussed and approved in principle the DOTC’s plan to buy out the private sector’s stakes in the commuter train system. Abaya said the “de-privatization” plan would cost the government about $1 billion.
The DOTC said the state takeover of the facility would spare the government from covering the 15-percent return on investment guaranteed to the MRT concessionaire.
MRT concessionaire Metro Rail Transit Corp. (MRTC), the consortium that built MRT-3, is controlled by Metro Pacific Investments Corp., the listed holding company in the Philippines of Hong Kong-based First Pacific group.
Although the government owns 80 percent economic interest in MRTC, through Land Bank of the Philippines and Development Bank of the Philippines, its voting rights are less than those held by the private concessionaire.
The consortium operating MRT-3, through special purpose vehicle MRT II Funding Corp., earlier raised funds via the issuance of MRT bonds. The bonds were bought by private corporations but were later bought back by DBP and LBP.
“We will be buying the bonds from DBP and LBP. It’s like retiring the bonds,” Abaya said. He added that the $1 billion estimated cost included the cost of buying back the bonds.
The buyout will take place next year, he said.
In the meantime, Businessman Manuel V. Pangilinan said his group would not stand in the way of the government’s planned buyout of the MRT line.
In an interview, Pangilinan said he would respect the government’s decision and would continue to support the administration’s infrastructure program.
The Pangilinan group, through Metro Pacific Investments Corp. (MPIC), owns the majority of the voting shares in MRT Corp., the private sector consortium that holds the train line’s concession contract. Despite controlling MRTC’s board, MPIC only holds a fraction of the MRT line’s economic benefits.—With a report from Paolo Montecillo
Follow Us
We Recommend
Recent Stories:
- Malaysian gaming firm threatens to sue PCSO
- Joblessness worsened in October–NSO
- Ayala seals Valenzuela land deal
- Philippine market up by 12.74 points
- Palace OKs proposed gov’t takeover of MRT-3
- Biz Buzz: Hot Cherry
- Moody’s raises PH growth forecast for 2012
- PLDT selling SPi Global
- Gov’t debt rises by 2% in October
- Car shopping for Christmas
Complete stories on our Digital Edition newsstand for tablets, netbooks and mobile phones; 14-issue free trial. About to step out? Get breaking alerts on your mobile.phone. Text ON INQ BREAKING to 4467, for Globe, Smart and Sun subscribers in the Philippines.
Short URL: http://business.inquirer.net/?p=98791
Tags: buy-out , Department of Transportation and Communications , Government , MRT 3 , rail transport , takeover
Posts
