SRI LANKA. Flemingo has been awarded the main five-year major duty free concession at Colombo Bandaranaike Airport, The Moodie Davitt Report can reveal. A second, smaller contract has been retendered with bids closing on 19 April.
Airport & Aviation Services Head of Commercial & Properties Geeth Karunarathna told The Moodie Davitt Report: “The tender was resolved by selecting one operator and to call fresh tenders for the selection of a second operator. The selected bidder is the consortium between Flemingo Duty Free Shop Pvt Ltd and Flemingo Duty Free Pvt Ltd. The new contract for five years is effective from 15/03/2017 and the agreement was signed [earlier this week -Ed].”
The business has been split for some years between Dufry-owned World Duty Free Group, which had the major space, and Flemingo. Total sales for the core category businesses in 2016 reached over US$90 million. The potential of the new contracts is enhanced by a major expansion of the airport due to be commissioned by 2020.
The tender continued the split concession model, with two concessionaires each managing one duty free shop in Arrivals and one in Departures, under five-year terms.
Two concessions were on offer as follows:
Departures restricted area
- Concession space 1 – 5,060sq ft
- Concession space 2 – 3,060sq ft
Arrivals restricted area
- Concession space 1 – 2,646sq ft
- Concession space 2 – 2,665sq ft
Bids were opened on 7 July 2016 but the award process was delayed for several months. Flemingo emerged as the highest bidder with a revenue share of 40% followed by World Duty Free (Dufry), B&S, The Shilla Duty Free and Aer Rianta International.
Flemingo will continue for now to operate from its current space and will move into the new expanded space from 1 July 2017.
In 2016 the airport serviced 9.47 million international passengers, a +14% rise year-on-year, buoyed by strong growth in Chinese traffic. The Chinese now rank as the airport’s second-biggest passenger group after Indians. The country’s ambitious development programme under the current political regime is resulting in tremendous infrastructure growth with many international hotels opening and close to 8,000 city apartment blocks being planned.
We’ll bring you an extended report on this key contract gain for emerging markets specialist Flemingo on Monday.
SECOND BID OPPORTUNITY
Bids are now invited for the second concession. The successful retailer will be able to sell liquor, beauty, confectionery and tobacco. The departures space is 3,060sq ft and the arrivals area 2,665sq ft.
Documents can be obtained from Airport & Aviation Services (Sri Lanka) up until 18 April. Each bidders must submit a security deposit of US$900,000.
A pre-bid briefing followed by a visit to the locations will be conducted on 31 March. Bids will be closed at 2.00 p.m. on 19 April.
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