BIAL, the company that operates the Bengaluru International Airport recently released it’s Tender Documents for it’s upcoming flagship T2 – Terminal 2 after the airport opened its doors in May 2008 and further expansion of existing Terminal areas over the years. BIAL has the distinction of being the first private greenfield airport in India with Zurich Airport, L&T and Siemens as stakeholders in the Private Public Partnership model of Airport development. The company is currently owned by Indian born Canadian Mr. Prem Watsa’s “Fairfax Holdings” with a minority stake by the State and Central Governments.
In a statement released recently, Mr. Hari Marar, Managing Director and CEO of BIAL said, “At BIAL, we take our partnerships very seriously. At every stage of the journey, we work with our partners in tandem, knowing that in their success lies the success of the airport ecosystem. As air travel recovers following the Covid-19 outbreak, BIAL wants to be aligned with partners and stakeholders to ensure an unparalleled range and quality of service. We look forward to world class retail from across the world coming together with BIAL to make T2 at BLR a place for the discerning traveller.”
The company has tweaked it’s commercial model to facilitate potential bidders to undergo the current pandemic situation as also to beable to withstand future impacts of the Covid-19 which is expected to spill through for the next 3-4 years. For the record, India served 140 mn passengers in FY 19-20 which reduced to 80 mn in FY 20-21 and is expected to be in the range of 45-50 mn for the current FY. With many international flights operating intermittently all through the last 12 months and with many countries not allowing Indian visitors to their countries, international traffic is expected to take a big hit this year. On the Domestic front, many corporates have moved to a WFH mode with almost zero-travel on work, which has made things difficult. With Business persons, Vacationers and Students avoiding domestic air travel, things have gone from bad to worse for airlines, airports and retailers across India.
The Tender evaluation policy (by BIAL) for its upcoming T2 Retail and F&B Tender has also been adapted keeping in mind the current business challenges. Accordingly, 60% wightage shall be given for the technical proposal and 40% to the commercial models and proposals offered by the tender participants. This is in stark contrast to most Government Tenders which follow the L1 or H1 model, that is the lowest (price) bidder or the highest bidder with limited or nil evaluation criteria to techincal capabilities of the participant.
The Retail and F&B business in India is estimated to be in the range of Rs. 3,500 Cr pa (pre-pandemic times). To give a perspective, the annual Retail and F&B revenues of Hong Kong International Airport (pre-pandemic) was estimated to be USD 1.30 Bn pa, Singapore Airport – USD 1.1 Bn pa and Dubai – USD 1 Bn pa. With the aviation boom in India and a younger population which was fond of air travel, Travel Retail business was poised to grow big in India but the pandemic has played spoil sport for all stakeholders.