SYNOPSIS

REQUEST FOR QUALIFICATION (RFQ) TO DEVELOP, OPERATE AND

MAINTAIN DUTY FREE RETAIL OUTLETS AT TERMINAL 3, COCHIN
INTERNATIONAL AIRPORT

LOCATION: COCHIN INTERNATIONAL AIRPORT, INDIA TERMINAL 3

PASSENGER TRAFFIC DATA: (As provided in Appendix II RFP Page 89)

YEAR INTERNATIONAL PAX TOTAL SALES

MOVEMENTS
ARRIVAL DEPARTURE
2010-11 1158563 1201374 2359937 $
16,413,486
2011-12 1289116 1298916 2588032 $
19,321,086
2012-13 1450986 1483031 2934017 $
20,988,825
2013-14 1610109 1661646 3271755 $
23,479,982
2014-15 1846317 1897663 3743980 $
27,176,582
2015-16 2163968 2248588 4412556 $
32,666,456

ORGANIZED BY: Cial Dutyfree and Retail Services Limited. (CDRSL)

IMPORTANT DATES: (Per Clause 1.6 RFP)

Date of issue of RFP 1st March 2017

Physical inspection of sites by Any working day(s) during sale of
potential bidders with prior RFP between 11:00 Hrs to 16:00 Hrs
intimation to CDRSL
Raising of queries by By 22nd March 2017 upto 1500 Hrs
applicant(s)/bidders in writing IST
Pre-Bid meeting of Potential On 20th March 2017 at 11:00 hrs at
Bidders Cochin International Airport
Reply of Queries by CDRSL By 30th March 2017
Submission of bids/proposal(s)- Upto 28th April 2017 by 1500 hrs.
Proposal Due Date(Technical as
well as Financial)
Opening of Technical On 28th April 2017 at 15:30 Hrs

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bids/Proposal(s)
Opening of financial bids/Proposal(s) Date & Time of opening of financial
bids shall be intimated
separately/subsequently only to the
technically qualified bidders

BIDDING PROCESS (Single Stage): (Per Clause 1.5 of RFP)

CDRSL has adopted a single stage selection process in evaluating the

Proposals, comprising Technical and Financial Proposals.

After receipt of Proposals, a technical evaluation will be carried out.

Based on the technical evaluation, a short-list of qualified bidders shall

be prepared.

Thereafter, the evaluation of Financial Proposals submitted by the

Qualified Bidders will be carried out. Financial Proposals will finally be
ranked and the Highest Bidder shall be selected for award of
Concession (the Selected Bidder).

TERM OF THE CONCESSION: (Per Section 5.3 of the RFP)

Five (05) years, unless terminated earlier. May be extended for

additional 2 years at the sole discretion of CDRSL. CDRSL reserves the
right not to award the extension if the concessionaire has not complied
with all the conditions laid out in the agreement.

The Concessionaire will have to operate the Concession for a minimum

period of one half of the Concession Term, failing which the
concessionaire shall be liable to be debarred for a period of 2 years or
as may be decided by CDRSL from participating in any future bidding
process of CDRSL, which shall be in addition to forfeiture of full amount
of security deposit.

ELIGIBILITY CRITERIA: (Per Clause 2.2.1 of RFP)

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The Bidder may be a single entity or a group of entities (the
Consortium).

A Bidder shall be liable for disqualification if such Bidder or its

Associate(s) has any amounts including interest outstanding and
payable to CDRSL or to any Airport operators in India or abroad (the
Outstanding Dues) where the bidder conducts similar duty free
operations as on 30 September 2016. ( To provide No dues
certificate in self-certification format to that effect) The decision
of CDRSL in respect of Outstanding Dues shall be final and binding on
the Bidder.

A Bidder including any Consortium Member or Associate should, in the

last 3 (three) years, have neither failed to perform on any contract, as
evidenced by imposition of a penalty by an arbitral or judicial authority
or a judicial pronouncement or arbitration award against the Bidder,
Consortium Member or Associate thereof, as the case may be, nor has
been expelled from any project or contract by any public entity nor
have had any contract terminated by any public entity for breach by
such Bidder, member of a Consortium or Associate thereof.

Notable Definition:

Associate shall mean, in relation to the Bidder/Consortium Member, a

person who controls, is controlled by, or is under the common control with
such Bidder/Consortium Member(the Associate). As used in this definition,
the expression control means, with respect to any person which is a
company or a corporation, the ownership directly or indirectly, of more than
50%(Fifty percent) of the voting shares of such person, and with respect to a
person which is not a company or corporation, the power to direct the
management and policies of such person by operation of law.

THRESHOLD ELIGIBILITY CRITERIA (Per Clause 2.2.2(A) of RFP)

The Bidder (in case of consortium, the Lead Member) or its Associate shall
satisfy each of the following criteria:

Bidder (or its Associate) shall have an operating experience (India or

Abroad) of at least five (5) continuous years in duty free business.

Bidder (or its Associate) shall have presence in 3 International Airports

(India or Abroad) out of which two (2) airports should have individually
handled at least five (5) million international passengers in any year
during the previous 3 years.

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 The bidder shall not have any pending, active or previous legal actions
against any of the Airport Operator with whom an agreement for duty
free operations are / were in existence; which prevents the bidder from
submitting the bid, executing the Concession Agreement, or fulfilling
the conditions of concession.

FINANCIAL CAPACITY (Per Clause 2.2.2(B) of RFP)

The Bidder (in case of consortium, the Lead Member) or its Associate shall
satisfy each of the following criteria.

The Bidder (or its Associate) shall have a turnover of not less than INR
5,000,000,000/-(INR Five Billion Only) in any three preceding financial
years from the business of operating duty free business in India or
overseas.

Documents to be submitted: (Per Note appended to Clause 2.2.2)

(i) Certificate from its Auditors certifying the sales turnover.

(ii) If annual turnover is denominated in currency other than INR, the
Bill Currency (Selling) exchange rate, as established by RBI on the
date of issue of RFP shall be used for calculating annual turnover.
(iii) Certificate from its Auditors certifying the number of years of
experience in operating duty free outlets.
(iv) Certificate from Auditors stating the turnover of the bidder, as at
the close of preceding financial years from the business of operating
duty free shops in India or overseas. Turnover shall mean the total
revenue earned from the sale of duty free items to ultimate
consumers.

GENERAL CONDITIONS OF BID: (Per Clause 2.3 of RFP)

The Bidder shall be required to quote in its Financial Proposal the

percentage (%) of Net Sales (not below 40%) which they are willing to
offer to CDRSL during the concession period. This amount shall be
excluding all taxes payable.

For the purposes of evaluation of the Financial Proposals, the highest

quoted percentage (%) of net sales in terms of revenue share offered

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 to CDRSL during the concession period shall be the sole parameter for
identification of the Highest Bidder.

The Selected Bidder shall procure all applicable permits & security
clearances under applicable laws, within 90 days of issue of Letter of
Intent to Award(LOIA), or as extended by CDRSL.

EARNEST MONEY DEPOSIT (EMD)

A Bidder is required to deposit, along with its Proposal, Earnest Money

Deposit of INR.15,000,000/- (Rupees Fifteen Million Only) through bank
transfer in the form of SWIFT/RTGS/NEFT . No other mode of EMD
payment shall be accepted.

EMD of unsuccessful bidders received through bank transfer mode

shall be refunded to the bank account. The EMD will be refunded to
bidders who fail to qualify the eligibility/technical stage.

Selected Bidders EMD will be returned, without any interest, upon the
selected bidders signing the concession agreement and furnishing the
security deposit. CDRSL at the option of the selected bidder may adjust
the amount of EMD towards the amount of Security Deposit to be
provided in accordance with the provisions of the concession
agreement.

MINIMUM ANNUAL GUARANTEE (MAG)

MAG shall be USD 13,188,745(USD Thirteen Million One Hundred

Eighty Eight Thousand Seven Hundred Forty Five Only) and for the
subsequent Concession Years, on hundred and ten percent (110%) of
the Minimum Annual Guarantee of immediate preceding Concession
year is applicable. Minimum Monthly Guarantee (MMG) shall mean the
absolute amount on a monthly basis, computed by dividing MAG for a
concession year by twelve.
Notable Definition:
Concession Fee for a particular month shall mean the higher of the
following:
(i) The Minimum Monthly Guarantee(MMG); or
(ii) Highest quoted percentage for revenue share of the monthly Net
Sales and shall be calculated and payable in the form and
manner as set out under the Concession Agreement.

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 SECURITY DEPOSIT:

An aggregate amount of INR 500,000,000(Indian Rupees five Hundred

Million) as interest free security deposit out of which INR
200,000,000(Indian Rupees Two Hundred Million) to be deposited in
cash and balance amount of INR 300,000,000(Indian Rupees Three
Hundred Million) as Bank Guarantee valid for a period of 6 months
beyond the expiry of concession term.

SPECIAL CONDITIONS OF THE BID (As per Clause 2E of the RFP)

ESCROW ACCOUNT (Per Clause 2.21 of RFP)

(i) Amounts collected by the concessionaire from its sales proceeds of

duty free at Cochin Airport shall be kept separately in an escrow
account, held in a fiduciary capacity.
(ii) The concessionaire shall open and operate a separate escrow account
with a scheduled bank, as notified by RBI and having its branch at
Cochin Airport Premises.
(iii) An escrow account agreement (Per Appendix VIII of RFP) will be
entered with the escrow banker by the concessionaire. Parties to the
escrow agreement would consist of concessionaire and escrow bank.
However, the escrow agreement will have a clause by which CDRSL will
have supervening powers to direct the escrow bank on the issues
regarding operations as well as withdrawals from the escrow account.
Escrow account shall be maintained, controlled and operated by
escrow bank under the escrow agreement.

Features of the Escrow Agreement:

Duty free collections : Concessionaire shall deposit immediately all

duty free collection realized through the daily sales at duty free
shops( including credit card collections and revenue through supplier
supported promotions, marketing supports, advertisments etc.

Auto Transfer from Escrow Account: Concessionaire should auto

transfer from escrow on daily basis in 28 equal instalments, the MMG
amount invoiced by CDRSL. Terms and conditions of payment of
calculation of monthly concession fee is as follows:

- MMG shall be invoiced by CDRSL in advance and same shall be

debited from Escrow and transferred to CDRSL account on 28 equal

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 instalments. A fund transfer instruction to be given by the
concessionaire.
- Concession fee in excess of MMG to be computed 10 days from the
completion of the concerned month. CDRSL on receipt of monthly
revenue figure shall invoice concessionaire in excess of MMG within
next 10 days. The amount invoiced shall be remitted before 30 th day
of the month of invoice.
- Monthly revenue figure for computation of revenue shall be
forwarded within 10 days from the end of concerned month. In case
of delay in submission of revenue figure, CDRSL reserves the right
to impose a penalty of USD 100 for each day of delay.
- In case of remittance of differential concession fee beyond the 30 th
day of the month of invoice, 18% penal interest will be applicable on
the invoiced amount.

Withdrawals from escrow account: Permitted to the Concessionaire

in the below order of priority:

- Daily transfer of collection to CDRSL account.

- To pay amounts towards statutory levies and taxes such as income
tax, service tax, VAT and GST
- To pay monthly concession fee arrears to CDRSL.
- To pay the value of stock transferred from CDRSL and not settled
after credit period of 90 days.
- To pay for expenses related to the duty free operations at Cochin
and or any other decisions of the concessionaire from time to time.
- Any surplus standing at the credit of escrow account can be
transferred to the concessionaires deposits account on meeting the
above conditions.

TRANSITION OF DUTY FREE BUSINESS (Per Clause 2.22)

CDRSL assumes that the duty free shop design, IT infrastructures,

Godown infrastructures are adequate and to the level required to
handle the level of capacity handled at the Airport. The Concessionaire
is free to improve or modify such/or any such factors to suit their
business plan. However, modification shall happen in a manner that
duty free operations shall prevail on a continuous basis. Once
operations are commenced by the concessionaire, any modifications
and improvements in the duty free shop shall be undertaken by the
concessionaire within the framework.

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 CDRSL reserves right to forfeit security deposit and terminate
concession agreement if the operation is not commenced within 60
days after license commencement date.

The Licenses and permission for operation of duty free outlets and
warehouses should be aligned so as to commence operations from the
target commencement date in uninterrupted manner.

The Concessionaire shall commence operations within 90 days of

award of LOIA. In case of default, the concession fee shall be paid from
the license commencement date. CDRSL shall have right to continue
existing duty free operations from same locations till the time the
operations are actually commenced. No abatement can be claimed by
the concessionaire.

PURCHASE/TAKE OVER OF BALANCE STOCK OF CDRSL (Per

Clause 2.23)

Balance stock of CDRSL to be taken/purchased by concessionaire at

landed cost of CDRSL. Normal stock value equivalent to 2 to 3 months
is USD 5 million.

The value of the stock transfer purchased by concessionaire to be

remitted within 90 days from date of transfer of stock to
concessionaire.

HANDING OVER OF DUTY FREE WAREHOUSE AND OFFICE AREAS

(Per Clause 2.24)

The area of approx. 4300 sqms alongwith the equipments to be used

on rental basis for the operations by the concessionaire at the annual
rent of INR 1,86,83,436( rates excluding taxes). Applicable annual
escalation is 10% w.e.f 1st July every year irrespective of access date.

RENT ON IT INFRASTRUCTURE (Per Clause 2.25)

Rent on IT infrastructure shall commence immediately from actual

commencement date of duty free operations as per rent included in
the annual rent of INR 1,86,83,436/-.

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 IMPORTANT DEFINITIVE DOCUMENTS TO BE SUBMITTED:

Certificate from Auditors.

No dues Certificate in the form of self-certification.
Documentary proof for passenger traffic and duty free location.
Duly Audited Balance sheet and profit and loss account for the
preceding 5 financial years.

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