AAI to invite tenders for duty-free shops in 7 airports

Mumbai, Jan 1 | Updated: Jan 2 2006, 05:45am hrs
Airports Authority of India (AAI) is planning to invite tenders for duty-free shops in seven airports across the country.

"We will invite technical bids for Ahmedabad, Bangalore, Calicut, Chennai, Goa, Kolkata and Thiruvananthapuram airports by mid-January 2006," confirmed a senior AAI official. The criteria for the bids are to be finalised within the first week of January. This time round, AAI will not invite tenders for Delhi and Mumbai airports due to the government's decision to privatise them, added the official.

Currently, most of the duty-free shops in the country are run by ITDC whose contracts have already expired. "ITDC will continue to run these shops till we make the final selections. We don't want to lose revenue in the process," said the official.

AAI is believed to be wooing global players like PT Inti Dufree Promosindo of Indonesia, Nuance Group of Australia, DFS of Singapore and SUTL services. Most of the players in the 'duty free' circuit are believed to be shying away from the bidding due to small spaces, which were being offered. The last tender called in October 2003 did not yield much result. AAI rejected technical bids by King Power Duty Free of Hong Kong and True Bell Marketing of Abu Dhabi, with Dubai-based Flemingo International the only eligible financial bidder, while ITDC was embroiled in a controversy after AAI rejected its bid over non-payment of dues close to Rs 20 crore.

STOP AND SHOP

Criteria for bids to be finalised by first week of January
Delhi and Mumbai left out due to privatisation
ITDC likely to be invited this time
Revenue expected to increase with foreign players' entry

However, this time round, ITDC might find a breather with AAI likely to invite them for the bids. "We would like to make the biddings more competitive," added the official.

In 2000, ITDC had outbid others by quoting Rs 37 crore. Officials said that the amount was absurd and was unable to earn commensurate returns.

Non-traffic revenue for AAI accounts to only around 30% of its entire revenue, whereas it is as high as 70% in other international airports.

AAI officials hope that if more foreign players enter, the revenue can be increased. Alpha Retail of Britian and Dubai-based Flemingo DFS are the global players operating in the country.