Life & Leisure

Life & Leisure: Hard and soft options

Ravi Teja Sharma / New Delhi October 17, 2006



RETAIL: ITDC wants private participation in turning its airport duty-free shops into world beaters.

India Tourism Development Corporation’s (ITDC) boring old duty-free shops have been around for ages. But can they jazz themselves up to move with global trends? The state-owned corporation certainly thinks so.

“ITDC is prepared to go into a joint venture with a private party,” says a senior ITDC official, adding though that “there is no question of selling a stake in our duty-free business.”

ITDC recently announced its half-yearly results in which the duty free division recorded a sharp turnaround. The first half of 2005-06 logged a loss of Rs 3.66 crore. The corresponding figure for 2006-07 shows a profit of Rs 2.64 crore.

So why go for a private sector joint venture? The 29 ITDC outlets across India need to get globally competitive, says the senior official, and for that, they need the sort of operational flexibility that a private partner can impart.

ITDC has shortlisted seven parties (five international and two Indian) for the JV, which, a source reveals, will conclude this month. IL&FS Infrastructure Development Corporation is ITDC’s transaction advisor in the selection of the strategic JV partner.

According to the expression-of-interest advertisement, ITDC would form a JV with the selected strategic partner to jointly bid for future duty-free business opportunities in the country and abroad. ITDC intends to have at least a 49-per cent equity stake in the proposed JV.

Are private players interested? Oh, yes. Atul Ahuja, director, Flemingo International, one of the other duty-free players in India, for example, says that it is avidly looking out for all possible duty-free opportunities in India. Flemingo has shops at 12 airports across India at the moment.

And opportunities are set to multiply. The new airports coming up across the country, at Delhi, Mumbai, Hyderabad and Bangalore, have all asked for proposals for duty-free shops from interested parties.

The last date for submitting bids for duty-free at Delhi International Airport Limited (DIAL) is October 18. The last date for submission of proposal for duty-free at the Bangalore International Airport Limited (BIAL) is October 30.

BIAL has shortlisted companies such as the DFS Group, Dufry International, Alpha Airports Group, Gebr Heinemann (with local partner The Oberoi Group), The Nuance Group (with local partner Shopper’s Stop) as well as Pantaloon Retail. That’s quite a few already, and many others may be be interested too.