Feasibility worries delay decision on Don Mueang duty-free tender
Airports of Thailand (AOT) has not yet decided the winners of tenders for duty-free and commercial-area operations at Don Mueang Airport, as it fears some bidders' proposals are not feasible.
Air Chief Marshal Sumet Photimanee, chairman of AOT, said after the board’s extraordinary meeting yesterday that it had not made any decision on the bids. The duty-free area is 1,100 square metres and commercial space covers 2,700sqm at the airport.
He said the board still needed to consider information, including proposals presented by bidders. “We have to compare all the information on hand with the terms of reference to see whether the bidders’ proposals are feasible.”
He said he would speed up consideration of the bids for commercial-area operations and expected these to be complete by next week. The Mall Group bid the highest price, giving AOT minimum revenue of Bt16.7 million per month as well as being response for installing sales-checking machines.
As for duty-free operations, Sumet said that although King Power Co would offer AOT the highest returns at Bt63 million a month, the authority needed to analyse the proposal’s feasibility.
“If the bidder cannot follow the contract, AOT will be put at risk. We do not consider only high benefits,” said Sumet, adding that King Power offered monthly returns Bt20 million higher than the second-highest bidder did.
“The company’s risk is our risk. If it cannot follow the proposed plan, what would we do? The number of passenger arrivals at the airport will be taken into the account. We insist that there is no political issue and we will hurry up with our decision before the full opening of the airport scheduled for October,” he said.
A source at AOT said the directors had discussed how much revenue could be reliably generated from the duty-free areas given the expectation of 3 million international passenger arrivals a year. King Power’s business plan adds up to as much as Bt756 million a year, which means annual sales would not be less than Bt5 billion to Bt6 billion. Therefore, AOT will ask for more clarification from King Power.
King Power pays AOT returns of Bt2 billion a year for its duty-free contract at Suvarnabhumi Airport, with 36 million international passenger arrivals.
