Hong Kong’s MTR Corporation is tendering its duty free business covering the West Kowloon Terminus Guangzhou-Shenzhen-Hong Kong Express Rail Link.

 

MTR is inviting interested parties to express their interest ahead of its planned June 2014 tender schedule for those who qualify for final bid stage. It adds that this business ‘will enhance Hong Kong’s role as the southern gateway’ to Mainland China.

 

The US$8bn West Kowloon Terminus is expected to open next year and handle around 99,000 passengers a day by 2016, providing high-speed train services of around 48 minutes between Hong Kong and Guangzhou compared with 100 minutes today. When its 15 platforms are all open, the station will provide a direct connection between Hong Kong and Beijing.

 

Interested parties ‘with relevant experience and financial strength’ are being asked to register their interest ‘no later than 17 April 2014 to the address details shown below, along with the following: company background and profile; date of incorporation; company organization; number of directors and key management; number of employees in the duty free business; shareholding and financial information, together with audited financial statements for the last three years.

 

In addition MTR is asking for details related to applicants’ number of years in the duty free business; total number of sales outlets in Hong Kong or elsewhere; operational capability and relevant experience in operating duty free business along cross-boundary and international borders; and the total number of green field projects operated.

 

Anway has raised the quality bar for railway station duty free shopping in Hong Kong and Lok Ma Chau Station is a prime example. (Photo credit 2014: David Hayes/TRB).

 

DETAILED COMPANY BACKGROUND

MTR is also looking for information on the business performance of companies within the duty free business over the last five years; landlord or concession management body references; average sales growth rates; average annual gross sales turnover; any holding company information.

 

Companies interested in this tender should register their interest with MTR at the following address (before April 17 2014) quoting on all correspondences “Expression of Interest for Operation of Duty Free Business at Express Rail Link West Kowloon Terminus”; MTR Corporation Limited, 20/F., MTR Headquarters Building, Telford Plaza, Kowloon Bay, Hong Kong. Attention: Purchasing Manager – Property & Marketing.

 

For any other enquiries, please contact Ms. Phyllis Tong, Senior Purchasing Officer MTR Corporation Limited quoting contract No.: Q032070. Tel: (852) 2993 8419; Fax: (852) 2993 7775; Email: [email protected]

 

Fine wine sales at Lok Ma Chau have performed very well, although the Chinese Government’s anti-luxury rhetoric has dented demand in recent months.(Photo credit 2014: David Hayes/TRB).

 

EXISTING BUSINESS REMAINS HUGE

[Anway – a sister company to Sky Connection in Hong Kong – currently operates separate Hong Kong-China duty free railway business at both Lo Wu and Lok Ma Chau stations. According to MTR Corp’s tender documents for the five-year concession commencing January 1, 2013, the Lo Wu duty free shop accounted for over 90% of the combined $262m gross revenue recorded in 2010 by Lo Wu, Hung Hom and the onboard Hong Kong-Guangzhou train duty free shops-Ed].

 

The number of railway passengers travelling through the existing Lo Wu and Lok Ma Chau stations alone is expected to show a +1% increase for 2013 when the figures are finally published. Based on earlier forecasts, this would suggest that around 142.6m inbound and outbound passengers used both stations in 2013, compared with 141.1m in 2012.

 

MTR now operates 1,329 shops in total and 55,946sq m of station retail space as of June 2013. Station retail ‘revenue’ for the six months to the end of June 2013 rose by 39.9% to HK$1,449m, eclipsing all other MTR commercial business, including advertising HK$454m (+6.1%), Telecom HK$217m (+29.9%) and ‘Others’ HK$74m (+8.8%).

 

TRBusiness conducted an exclusive on site interview with Anway in Hong Kong only recently in the February edition of the magazine, providing the only recent in-depth insight into this huge business. Copies of this edition can be obtained by contacting [email protected]