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KCRC’s Hung Hom Station, home to one of the important duty free contracts on offer in the new tender |
HONG KONG. One of Asia’s major duty free contracts has been put to tender. The Kowloon-Canton Railway Corporation (KCRC) is offering to the market a licence to operate duty free business at Hung Hom and Lo Wu stations and onboard the KCR Through Train.
The contract is currently held by DFB Services & Consultants Ltd. For tobacco and liquor, especially, it is big business; the Lo Wu crossing handles around 250,000 travellers per day. The new contract will run for five years, beginning on or around 1 January 2008.
KCRC currently provides three domestic passenger rail services: East Rail (including Ma On Shan Rail), West Rail and Light Rail. East Rail, a suburban mass transit service, is Hong Kong’s primary north-south transportation artery. It operates between East Tsim Sha Tsui and the Mainland boundary at Lo Wu.
Duty free sales on the East Rail link and onboard through trains rose +10.8% in 2006 compared to 2005, said KCRC, mainly due to the rise in Mainland Chinese visitors to Hong Kong in the period and a series of promotional campaigns.
Bids for the duty free contract are due in by Friday 29 June 2007 accompanied by a tender deposit in the form of a bank cashier order of HK$15,000,000.
Tenders will be assessed according to background, including financial status, experience, past performance, business plan and the financial proposal. Tenderers with less than five years’ experience in the duty free business will not be considered.
KCRC, established in 1982, is a public corporation providing mass transport services in the Hong Kong Special Administrative Region.
KCRC is one of the world’s most successful railway operators: each day it carries about 1.5 million passengers on its 113km network.
At least three major regional players are likely to contest the tender, including DFB Services & Consultants Ltd, Nuance-Watson and Sky Connection. DFS is another possibility. As first revealed by The Moodie Report in May last year, Sky Connection won a five-year contract to operate 3,000sq m of duty free space at another lucrative border crossing, the new KCR railway terminus between Lok Ma Chau on the Hong Kong side and Huang Gang on the Chinese side of the border.
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KCRC carries about 1.5 million passengers a day across its network; around 250,000 cross the border at Lo Wu |
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