AOT finalising TOR for Suvarnabhumi duty-free concession

By The Nation

 

 

BIDs for the concession to operate the duty-free zone at Suvarnabhumi, the country’s largest airport, are likely to be called soon.

 

Airports of Thailand (AOT) said it would soon be sending a proposal regarding bidding for the Suvarnabhumi Airport concession to its board of directors. AOT president Nitinai Sirismatthakarn said the terms of reference (TOR) for the bidding were in the process of being drawn up and were expected to be finalised within this month. After that it would proceed according to the 2013 Public-Private Joint Venture Act.

 

The AOT aims to grant a new concession for management of the duty-free zone at Suvarnabhumi Airport two years before the current concession contract expires in September 2020. The current concession is held by King Power.

 

The AOT consultant on the TOR has studied the pros and cons of the two major concession-awarding options – awarding to a single operator or to multiple operators. 

 

Nitinai said that when granting the concession, the AOT must take into account many aspects in managing the zone. For example, in granting the concession to multiple operators, who would manage the zone on the right side of the airport, and who would get the left side? Also, what about situations when the landing of flights cause rightside passenger traffic to be far greater than on the left side?

Such scenarios would need to be considered, said Nitinai.

 

Another scenario that could arise in granting concessions to two operators is who would operate the main building zone, and who would get the satellite building zone. The latter could face business difficulties if the former held marketing events that attracted passengers, as the passengers who arrived at the satellite building would be in a rush to board their flights.

 

Suvarnabhumi Airport would be offering for management a total of 19,000 square metres of space. The dutyfree zone is divided into passenger terminal building one, totalling 11,000 square metres; passenger terminal building 2, totalling 5,000sqm; and satellite building, totalling 3,000sqm.

 

Several parties had recently suggested that the AOT consider granting the concession to multiple operators rather than to a single operator to avoid creating a monopoly.

 

In March, representatives of Thai Retailers Association, the Thai Duty Free Shop Trade Association and the Thai Shopping Centre Association jointly submitted a proposal to Prime Minister Prayut Chanocha, calling for a revamp of the system for granting a concession to dutyfree shops in order to ensure transparency and fairness.

 

According to the proposal, instead of awarding one concession, the AOT should award several concessions based on the type of merchandise sold.

Source: http://www.nationmultimedia.com/detail/business/30346383

 

-- © Copyright The Nation 2018-05-28

Can see KingPower campaign hard to keep the concession as

a monopoly,with them winning it,as they will not want to lose

such a big money spinner,if they lose they might have to sell

Leicester football club.

regards worgeordie

3 hours ago, webfact said:

Nitinai said that when granting the concession, the AOT must take into account many aspects in managing the zone. For example, in granting the concession to multiple operators, who would manage the zone on the right side of the airport, and who would get the left side? Also, what about situations when the landing of flights cause rightside passenger traffic to be far greater than on the left side?

 Such scenarios would need to be considered, said Nitinai.

 

Another scenario that could arise in granting concessions to two operators is who would operate the main building zone, and who would get the satellite building zone. The latter could face business difficulties if the former held marketing events that attracted passengers, as the passengers who arrived at the satellite building would be in a rush to board their flights.

 

If multiple operators are offering different products then surely this is irrelevant. People who want to buy perfume are going to go to the perfume section and not the cigarette store, whether it's on the right, left or in the basement! I do accept this may be an issue for impulse buyers but I'd have thought any other operator would be delighted just to get a foothold in AOT's airports just to break the current monopoly.

 

It seems to me they're already  offering reasons to consider only one operator ... and we know who that will be.

Boot out the King Power monopoly.  Their prices are higher than 7-11s.  Drawing up Terms of Reference means who's going to make the biggest bribe.

 

It is to be hoped that AOT decide on multiple duty free shop operators and that King Power is not one of them.

Competition is certainly needed there as many items are much more expensive in the airport than the shopping malls.