Hyderabad airport lays down steep terms for duty-free shops

New Delhi/Mumbai: GMR Group has laid down fresh terms for firms looking to run duty-free shops at the Hyderabad airport, two people familiar with the matter said.
GMR Hyderabad International Airport Ltd (Ghial) will invite bids shortly for a duty-free operator after Nuance Group AG, the world's leading airport retail firm, decided to exit by end-May.
An executive at an international duty-free operator, who visited the Hyderabad airport on Monday as part of a tour of its retail facilities for potential bidders, said GMR has set “steep” financial terms for the contract winner, including a one-time fee of Rs30 crore to be paid within a few days of winning the bid.
“This is something new and very ambitious,” said the executive. “Even if you are aggressive and do extremely well, it will take five-seven years to recover the Rs30 crore down payment you make.”
The executive, who didn’t want to be named, said GMR will invite bids on a revenue-sharing basis for 15 years. The firm pledging the highest percentage of revenue share would win the contract.
An executive at Ghial confirmed the terms on condition of anonymity.
27/04/10 Rasul Bailay/P.R. Sanjai/Live Mint

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Categories: Airports Apr 2010