AAI issues duty-free tender for five Indian airports

Nicole Mezzasalma

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The tender is for contracts to operate arrivals and departures duty-free stores at Trivandrum, Jaipur, Lucknow, Srinagar and Coimbatore airports

Airports Authority of India (AAI) has issued a tender for the operation of arrivals and departures duty-free stores at five airports around the country: Trivandrum, Jaipur, Lucknow, Srinagar and Coimbatore. AAI said the contract for each airport will be awarded under a separate licence agreement, valid for three years “subject to the condition that in the event of leasing out the airport under PPP [public-private partnership] before the expiry of the allotted period, the licence shall be terminated by a short notice and it will be binding upon the licensee”.

A total of 253sq m (2,723sq ft) of retail space will be available in the five airports. Trivandrum airport has a 24sq m (258sq ft) arrivals store and a 20sq m (215sq ft) departures shop. Jaipur features a 22sq m (236sq ft) arrivals outlet and a 21sq m (226sq ft) departures store. Lucknow offers an 18sq m (194sq ft) arrivals shop and a 16sq m (172sq ft) departures outlet. Srinagar has the largest stores, a 59sq m (635sq ft) arrivals outlet and a 64sq m (689sq ft) departures shop, while Coimbatore has a 9sq m (97sq ft) arrivals store.

Successful bidders will be required to begin operating the stores within 90 days following the award by AAI. The licences will commence from the date of handing over the space or after 90 days, whichever is earlier. The space licence fee for Trivandrum airport is $69 per square metre, while for the other airports the fee is $44 per square metre. In addition, AAI expects a minimum annual guarantee per square metre of $11,000 at Trivandrum airport, $7,607 at Jaipur, Lucknow and Srinagar airports, and $3,147 at Coimbatore. Both fees are subject to a 10% increase after one year.

The airport authority requires prospective bidders to have a minimum five years’ experience in the operation of duty-free shops at airports, seaports, inflight, free ports, downtown or military outlets in India or abroad and a minimum annual turnover of $4m from those operations. The tender document specified that in the case of a joint venture, “the turnover of the group of companies and experience shall be taken into account while evaluating the tender”, and the leader of the consortium—who must meet 80% of the qualification criteria and accept overall responsibility for the contract—must be specified by the bidder.

The deadline for bid submissions is July 23. Click here to see the full tender document.