The Airports Authority of India (AAI) has decided to re-tender for running duty free shops to foreign shop chains. These include shops that are being run by ITDC as well as new shops. Around 30 duty free outlets exist in Delhi, Mumbai, Chennai, Calcutta, Goa and Thiruvanthapuram.
The main shops will be offered in the proposed global tender.
AAI sources, however, said the authority had yet to seek the civil aviation ministry's clearance.
ITDC has refused to give even a minimum revenue guarantee of Rs 50 crore per year to AAI.
The move, if it goes through, will hit ITDC badly. It earns around 25 per cent of its turnover from duty free shops. In 1995, a tender was floated by AAI for some minor shops in non-prime locations and certain new locations. Several foreign companies responded but subsequently dropped out.
AAI then shortlisted a Swiss company, Weitnaur. This has, however, not been cleared with questions being raised over the tendering process.
Ministry sources explained that the 1995 tendering was restricted to the "nooks and crannies" at airports since ITDC was monopolising the best shop locations.
However, now with ITDC refusing the minimum guarantee and in view of the low revenues it gives, AAI has decided to push ahead for all shops.
The process can be started and tenders opened once the existing leases with ITDC expire, said sources. AAI sources, however, said the ministry may have reservations on throwing open all shops and that a consensus would have to be reached on this.
In accordance, non-aeronautical revenue targets for 1998-99 for AAI have been hiked significantly to around Rs 500 crore, up by Rs 100 crore from last year. Non-aeronautical revenue includes lease rentals and revenue earned from cafeteria services and shops at airports. In fact, it is estimated that the foreign chains will be able to give AAI in one year, what ITDC gives in five years.
