The company PAC-Duty Free SAL retains the management and operation of duty-free shops at Beirut International Airport following a third call for tenders. (Credit: PHB)
At first glance, the third time is the charm when it comes to the management and operation of the duty free stores at Beirut International Airport.
On Tuesday, caretaker Public Works and Transport Minister Ali Hamieh announced that PAC-Duty Free SAL was awarded the contract following the third tendering process, after the cancellation of the first two processes launched in 2022.
This allows the company, which won the contract following the second tender, to remain in place with an important difference in the operating conditions: it will have to pay the revenues due to the state in USD, while its previous contract allowed it to do so in Lebanese lira.
The amount to be paid each year is $38.2 million, in addition to a fee of $3.50 per passenger. The tender, which was launched on Dec. 21, was published on Jan. 13 and PAC was the only candidate. It included a reserve price of $37 million.
Reworked specifications
The contract of PAC, which has been in charge of this space since 2002, following several renewals and calls for tender, had expired last year, after which a new tender process was supposed to take place.
The first tender was launched on June 20 and ended in failure. It was canceled on July 14, when bidding was open, even though only one company had made an offer.
The specifications were then reworked and the amounts at stake, still denominated in Lebanese lira, were revised upwards to take account of the depreciation.
In light of this, the Public Procurement Authority made reservations about the specifications in question. In particular, it believes that the reserve price (minimum sum) of LL800 billion is “too low” and questions the fact that the bids are made in lira and not in USD, while the company in charge of operating this space will be paid in dollars.
However, these reservations were not taken into account and PAC was named the winner on Sep. 22 after the opening of bidding in this second tender launched on Aug. 19.
According to the minutes of this tender, PAC proposed to pay the State LL1.12 trillion per year, while InterWorld SARL, the only company competing against PAC, offered to pay a lower sum equivalent to LL1 trillion. In addition to these sums, the winner will have to pay the state a flat fee of $3.5 per passenger in foreign currency.
Although the announcement was made Sept. 27, its entry into force was subject to the minister’s final signature and to validation by the regulatory authority within 10 days.
In the end, this did not happen, leaving the way open for a new call for tenders, with the amounts mentioned in the specifications this time denominated in USD.
