Putrajaya says RM8.6m was ‘compensation’ to Utusan

Tian Chua asked if Utusan was given special consideration because it was Umno-owned. — file pic

KUALA LUMPUR, June 23 — Putrajaya explained today that it has agreed to pay Utusan Melayu (M) Bhd, RTM’s marketing agent, RM8.6 million as compensation for the station’s cancellation of several advertising time slots.

This, said Deputy Information, Communication and Culture Minister Datuk Joseph Salang Gandum in Parliament tonight, was despite UMMB’s failure to hit its RM70 million advertising target for the public broadcast station.

“This is for money already spent by UMMB to obtain clients and also the artwork they prepared for the advertisements.

“The RM8.6 million was supposed to be inserted into the 2011 Budget but because of the ongoing negotiation between Utusan and RTM, this claim was not finalised in time. But the claim has now already been agreed on,” he said in his winding up speech for committee stage debates on the Supplementary Supply Bill.

Salang explained that UMMB had signed a three-year agreement to be RTM’s marketing agent from July 2007 to 2010.

Under the contract, UMMB must achieve a minimum target of RM70 million in television airtime sales and RM13 million for radio airtime sales.

During the three-year period, however, he said, RTM had to slash some of its advertising time slots to air other programmes of national importance.

He pointed out that the cancellation had caused UMMB to incur “opportunity costs” and the company had fallen short of its targets, which was the reason why the government had agreed to compensate the firm.

Salang was forced to address the matter after Chua Tian Chang (PKR-Batu) questioned purpose of the RM8.6 million payment and the reason behind the appointment of the Umno-owned UMMB as RTM’s marketing agent.

In his response to the deputy minister, Chua objected and said the compensation sum was a “subjective” matter.

“We cannot give an accurate evaluation on this claim by Utusan (UMMB) so it is misleading. We cannot say this is fair to taxpayers and this concept is a moral hazard because Utusan is owned by the ruling party and the decision makers, the ones who decide whether to pay the compensation and how much, are also those from the ruling party. Where is the ethics?” he said.

He also questioned if UMMB was selected as RTM’s marketing agent because of its “special position” of being owned by Umno.

“Does Utusan have this special position? Why not The Star? Can the government evaluate the company’s effectiveness as RTM’s agent so that we can select an agent that can give better returns to RTM?” he asked.

Salang replied that his ministry might consider appointing other companies as RTM’s marketing agent after UMMB’s renewed two-year contract with the station expires in December 2012.

Speaking to The Malaysian Insider outside the Parliament chambers later, Salang said the new agreement between UMMB and RTM no longer stipulates that the latter firm would be compensated for any cut in advertising time slots.