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According to the newspaper, the AAI has abandoned its original plan to tender the contracts because bidders themselves backed out following uncertainty about future AAI policy on the airport. Following an announcement by the AAI that it would invite bidding for three-year retail contracts at Chennai, Kolkata, Ahmadabad and Jaipur airports, it emerged that around nine “world-class” duty-free companies indicated they were backing away from the contracts.
Worries about red tape and long procedures also affected short-contract interest. The Times of India quoted on airport official as saying: “The companies were wary of investing when they found out that they will lose around a year obtaining permissions and clearance for a three-year contract.”
It is now expected that a private company will handle tendering if it is decided that the AAI lacks the commercial freedom and expertise to create the kind of contracts that authorities are ultimately hoping for. That would mean bringing in the big brands and companies that could secure a strong revenue stream for India’s airports.
