New Delhi: The Delhi International Airport Ltd (DIAL) has received bids on Friday from five international retailers to jointly operate duty free shops in the upcoming main terminal building, even as a committee formed by the civil aviation ministry reviews the proposal of a joint venture.
The overseas companies that have placed their bids are—Dubai-based Flemingo International Ltd, Turkish firm Setur Sevis Turistik AS, Dublin-based Aer Rianta International, Switzerland-listed Dufry AG and Spanish operator Aldeasa SA—according to two people familiar with the matter.
DIAL will award the duty-free concession of India’s largest terminal to the company that would part with the highest portion of its revenue to the airport developer. The winner would also have to form a 51:49 joint venture with DIAL.
Joint operation: The new terminal 1D at New Delhi’s IGI Airport. Ramesh Pathania / Mint
The venture will run duty free stores at the 20,000 sq. m of retailing space proposed at the terminal for 10 years, which would be extended by another five years.
New Delhi’s Indira Gandhi International Airport is being developed by consortium led by India’s GMR Infrastructure Ltd on a 30-year contract with a pledge to share 46% of the airport’s revenue with the country’s state-run airport regulator Airports Authority of India.
Analysts have said DIAL’s proposal could reduce the revenue that the developer would share with the government, Mint reported on Thursday.
Duty-free retail at airports have invited controversies at the international airports in Mumbai and Bangalore over bidding processes and business potential. The two airports awarded retail concessions on a straight lease, based on a formula that hinged on highest rentals offered.
In 2007, Mumbai International Airport Ltd scrapped a contract given to a venture of Spain’s Aldeasa and state-owned India Tourism Development Corp. after the winner wanted to renegotiate the contract fee. The contract was later awarded to Hong Kong-based DFS Group.
Late last year, the Karnataka high court quashed the award of a concession by Bangalore International Airport Ltd to a venture between Zurich-based Nuance Group and India’s Shoppers Stop Ltd, after Dubai’s Flemingo alleged that it had been wrongly excluded from the bidding process. The Supreme Court has temporarily stayed the Karnataka high court ruling, allowing Nuance-Shoppers Stop to continue even as it hears the case.