Lebanon Businessnews News

Airport duty-free bid
won by current operator
Value is half the previous contract

when converted to fresh dollars

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The contract of Phoenicia Aer Rianta Co. (PAC-Duty Free) to operate the duty free market at Beirut Rafic Hariri International Airport has been extended for another four years after the company emerged as winner in a bidding auction.

The new deal, which is mostly in lira, is worth half the previous contract when converted to fresh dollars.

The new contract is valued at LL1.9 trillion per year ($50 million at an exchange rate of LL38,000). It comprises a fixed amount of LL1.12 trillion ($29 million) with the remaining LL780 billion ($21 million) consisting of the total fees charged on passengers at the rate of $3.5 per passenger. The sum of $21 million corresponds to an annual passenger traffic of nearly six million passengers. Excluding 2021, which was an exceptional year due to global Covid-19 restrictions, the average passenger traffic at the airport over the period 2017-2020 was 7.1 million.

The Ministry of Public Works and Transport said that the previous deal, which was awarded to PAC-Duty Free in 2017, was valued at LL150 billion per year ($100 million at the official exchange rate of LL1,500 that was prevailing that year).

The other company that has participated at the auction was InterWorld. It has submitted a bid of LL1 trillion for the fixed amount of the deal while that of PAC-Duty Free was LL1.12 trillion. The auction was started at an opening bid of LL850 billion plus the $3.5 per passenger fee.

Jean Ellieh, Director General of the Department of Tenders, said that it is ideally preferable that government deals are entirely denominated in dollars but in light of the current circumstances and uncertainty about the future, it is necessary to charge at least part of the deal in lira in order to attract bidders.

PAC-Duty Free is owned and chaired by Mohamed Zeidan.

The ministry plans to launch bids for restaurants and two fuel stations at the airport before year end.
Date Posted: Sep 28, 2022
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