The Norman Manley International Airport, Palisadoes, Kingston, photographed on March 20, 2006. The airport is currently undergoing refurbishing. - Andrew Smith/Photography Editor

John Myers Jr., Business Reporter

The Norman Manley International Airports Limited (NMIAL) sale of concessions for commercial space at the expanded airport has generated lukewarm response, forcing a second bid round.

NMIAL, a subsidiary company of the Airports Authority of Jamaica (AAJ) established to manage Norman Manley, received only 36 proposals at the close of applications on June 29, though more than 200 tender documents had been issued.

Not tendered on

"First glance already tells us that a couple of the offers were not tendered on," AAJ vice-president of commercial development, marketing and planning, Mark Williams, told Wednesday Business. "We had four duty-free offerings and two were tendered on."

Although, NMIAL is selling concessions for only 35 shops, with the tender briefings and the number of tender packages issued, the company had "expected a little more," Williams said.

About four or five bids that came in beyond the 2:00 p.m. deadline on June 29 wererejected.

NMIAL, whose chief executive is AAJ president Earl Richards, tendered for concessionaires in April. The 35 shops cover some 2,500 square feet of space at the airport, the smallest of the two international gateways for travel into Jamaica.

'Uniquely Jamaican' concept

Some 1.7 million passengers pass through Kingston based Norman Manley annually, compared to about 4.8 million at Sangster International. The smaller airport is undergoing a US$112 million expansion, phase 1A of which is costing US$80 million. It is due for completion in October.

The new shops are part of the ongoing project. These spaces have been divided into three main areas: duty-free, speciality retail and food and beverage. All shops, which range from 150 square feet to 3,000 square feet, are expected to conform to the airport's 'uniquely Jamaican' design concept and bidders were required to invest at least $3 million in setting up the business.

The lease is calculated at 1.5 per cent of gross sales, with a floor of US$40 to US$120 per square foot ($2,720 to $8,160) depending on whether it is a duty-free, speciality retail or food and beverage business.

Applicants for concession contracts were required to submit one original tender along with five copies.

The bids had to be accompanied by a security fee of $500,000 - $200,000 for kiosks - a business and marketing plan, outline of the design for the space and audited financial statements for the last three years for an established company.

The requirements might have scared off potential business interests, the NMIAL vice president acknowledged. Additionally, there were complaints, he said, that the process might have been too tedious.

"We don't think it was tedious; we think it was very comprehensive and then - because we are raising the standards at the airport - its much more than the average retailer would look for," Williams said in defence. "What we wanted to do was to ensure the fairness of the process. We have six independent evaluatorswho meet as a team and defend their marking, and then we put that together and bring it to the board."

The AAJ vice-president said the bid security fee was introduced to prevent potential investors from pulling out after they had submitted a bid.

"We have had experiences in the past where we have actually awarded tender to people and they change their minds and we have to go through the process again."

A six-member team will now evaluate the bids, after which they will meet and make their recommendations to the NMIAL board. A decision on winning concessions will be made in time to allow for at least a three-month build-out period.

The two duty-free offers for which no tender was received will be put back to tender, Williams said.