BIA duty free shops: Tender delays cause concern and confusion

Tenders for two new duty free operators for the Bandaranaike International Airport have still not been awarded, despite bids having been lodged more than three months ago.

Instead, the Airport and Aviation Services Ltd (AASL) has extended the contracts of existing operators Flemingo and World Duty Free (WDF) till next month. Both contracts expired in August.

The delay -- which has not been explained by AASL or the Civil Aviation Ministry -- has placed bidders in difficulty as they had each submitted a bid bond of US$ 900,000. Unsuccessful parties can recover this money.

“But it is tied up because they are not telling us what has hap- pened with our applications,” said a spokesman for one bidder. “If our bids are rejected, they must inform us so that we can go to the Procurement Appeals Board.”

There were five offers by Shilla Duty Free, Ari-Anta International Duty Free and B&S Airport Retail as well as existing operators Flemingo and WDF. “The tenders are still under evaluation,” Johanne Jayaratne, AASL Executive Director, recently told the Sunday Times. “I don’t have too much detail. The existing operators have been given and extension till December.”

The tender was mired in confusion from the start. It was advertised by the Civil Aviation Ministry earlier this year. The closing date for submission of bids was first specified as June 23, 2016. It was shifted to July 25 and then back to July 7. Several prospective bidders raised alarm at the unexpected changes, fearing they would “allow for manipulation of the process”.

Till August, the duty free facility at BIA was split between WDF and Flemingo. They signed up in mid-2011 for five years. But previously the contracts were awarded as a franchise right with no tender procedure or competitive bidding. The new contracts will also be for five years. The shops will be in the departure and arrival lounges.

It was revealed at the pre-bid meeting in June that the alcohol accounted for sixty percent of duty free sales at BIA, followed by confectionery, then perfumes and toiletries. The lowest share was for tobacco.