The airport operator and owner of Cochin International Airport (CIAL) in Kerala, India has officially published a notice regarding a duty free tender for 33,000sq ft of retail space within the airport’s new international Terminal 3.

The tender is due to be ‘released’ on 1 March and will be open until the end of the month.

The bidder, for the five-year contract (with a two-year renewal option) may be a single entity or a group of entities such as a consortium, says CIAL who is issuing an open invite as well as directly approaching select duty free operators.

The deadline for submission of bids is 28 April and the successful bidder is expected to begin trading on or before 1 September 2017.

Cochin International Airport was the first airport to be built under the Public Private Participation (PPP model) in India and commenced operation in 1999.

SUCCESSFUL BIDDER MUST PURCHASE CDRSL STOCK

In 2016, CIAL incorporated a wholly owned public limited subsidiary company, ‘CIAL Duty free and Retail Services Limited’ (CDRSL). “CIAL subsequently hived off its duty free business and entrusted the same to CDRSL with effect from 1 June 2016,” adds the operator.

The airport, which is the first in the world to fully run on solar power served a total of 7.77m passengers in FY 2015-16 of which 4.64m were international.

The successful bidder must purchase the balance stock of CDRSL on the commencement date of their duty free contract and ensure ‘uninterrupted duty free products sales and services to the international passengers of Cochin International Airport’.

Click to enlarge table.

They also must avail the warehouse, office space, video walls, portrait video facilities, etc. on rental basis, as determined by CDRSL.

The airport, which is the first in the world to fully run on solar power served a total of 7.77m passengers in FY 2015-16 of which 4.64m were international.

33,000SQ FT OF DUTY FREE SPACE

CIAL’s new 1.5m sq ft terminal international Terminal 3, has allocated around 33,000sq ft to duty free operations.

In 2016, CIAL incorporated a wholly owned public limited subsidiary company, ‘CIAL Duty free and Retail Services Limited’ (CDRSL).

“CIAL’s duty free operations commenced in 2002. From a very humble beginning during 2002-03, the duty free business has rapidly grown to such an extent that it is the major driver of growth and revenue for the company,” says the airport operator.

“For the FY 2015-16, duty free has significantly contributed to the total revenue of CIAL. In 2013, CIAL constructed a state-of-art warehouse (approximately 4800 sq m) with required office area in the airport premises to support its duty free operations.”

CIAL asks that the bidder have more than five years experience in operating duty free shops and have a presence in three international airports out of which two much serve at least 5m international passengers a year.

“The bidder (or its associate) shall have a turnover of not less than INR.5000,000,000 in any three preceding financial years from the business of operating duty free business in India or overseas,” stipulates CIAL.

In the first year of the contract the MAG (Minimum Annual Guarantee) will be USD$13,188,745 and for the subsequent years, it will be 110% of the MAG in the preceding year.