After four days of intense negotiation, this morning Incheon International Airport Corporation (IIAC) and the Korean Customs Service (KCS) finally came to an uneasy compromise on the terms of its Terminal 2 duty free RFP.

 

A source in Korea told TRBusiness that it was in the IIAC’s interest to follow pre-existing airport procedures in issuing this tender, however, it has had to concede to some fundamental changes suggested by the Korean Government.

 

TRBusiness understands that the new terms make the tender unfavourable for foreign/international bidders; something which does not sit well with the airport authority.

 

The airport will now select two candidates for each tender category/package and the KCS’ licence regulation committee will finalise the winners using their own criteria, reveals the source.

 

TWO-STEP TENDER PROCESS

This effectively means bidders will need to go through a two-step tender process; one for the IIAC and another for the KCS with scores weighing 50% for each.

 

“For the bidders it’s a very complicated and difficult situation,” adds the source. “They have many things to consider and they also have to prepare the two separate proposals at the same time. One for IIAC and one for KCS.”

 

TRBusiness understands that the KCS final licence committee will be considering the successful bidders’ potential contributions to the Korean tourism industry; this is more common in the the issue of downtown licences.

 

The IIAC has now revealed the details of its RFP for six duty free concession packages; three available to ‘general enterprises’ and three for small and medium size enterprises. Technically speaking, foreign companies are permitted to submit proposals, but due to the now unfavourable conditions of the tender, the source believes it is unlikely that the airport will see significant interest from international operators.

 

Bidders will be evaluated and scored by the IIAC on ‘business capacity’ (60%) and the ‘financial proposal price’ (40%) after which the same companies will be evaluated by the KCS (as outlined in the two-step process mentioned above).

 

DEADLINE FOR SUBMISSION: 31 MARCH

The deadline for submission of proposals is 31 March 2017. The new terminal is slated to open in October of this year and the contract term for each of the packages will be five years from the date of opening.

 

The airport presents its vision for the new terminal.