NEW DELHI, Feb 9; The Airports Authority of India (AAI) is close to awarding a license to Switzerland-based Whitener for setting up and operating duty-free shops at the five international airports of Delhi, Mumbai, Chennai, Calcutta and Thiruvananthapuram. The chain has been chosen after negotiations with the two top bidders for the tender -- Whitener and Lion City of Singapore.The company and the terms of the license will now have to be granted final approval by the AAI board. Whitener will pay the AAI a guaranteed annual licence fee of Rs 50 crore a year, to total Rs 250 crore for five years. AAI sources said there had been no Indian company in the fray. AAI officials said the International chain will share space at the airports with the India Tourism Development Corporation (ITDC) which currently runs all the duty-free shops in the country. The original tender floated in 1996 provided for additional space for duty-free shops to be operated by private parties.
Subsequently, it was decided that afterITDC's five-year term ended in 1997, the private party would be allowed to operate over the entire space.
After hectic lobbying by the government that ITDC should not lose its contract. the AAI has decided that both parties will share space. The AAI will decide what merchandise the shops will have to stock and at what price levels. AAI officials said negotiations on these matters were still underway.
However, the AAI was keen on inviting bids from private chains so that its revenue from non-operational areas could improve.The AAI board took a conscious decision to augment its income from commercial operations to boost profitability. The authority hopes to end the year with a profit of Rs 249 crore, Rs 3 crore more than last year.However, even that could be strained if the Civil Aviation Ministry decides not to allow any increase in the airport charges. This year the authority will also have to pay out roughly Rs 15 crore by way of enhanced payments to its employees.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
