 |
SAIPAN. The Commonwealth Ports Authority (CPA) is weighing up its next move on the master concession agreement at Francisco C. Ada/Saipan International Airport, after it received submissions last week on the matter from current and potential stakeholders and other interested parties.
DFS Saipan operates the master concession (embracing duty free, specialist retail and food & beverage), which expires on 13 November 2015.
Local newspaper Marianas Variety has reported that “435 individuals, organizations or businesses turned in comments for or against DFS’s master concession agreement”. Lotte Duty Free, which was named among them, subsequently confirmed to The Moodie Report that it had sent a letter of intent to the CPA, outlining its interest.
Earlier this month Lotte Duty Free Director – Global Business Planning Team Steve Park told us: “Saipan is an attractive opportunity for Lotte Duty Free, where we believe we can add significant value to the airport and the local community, just as we have done in Guam. Lotte Duty Free is extremely interested in participating if the Commonwealth Ports Authority decides to go to public tender.”
The submissions to the CPA follow the recent publication of a study by consultant Ricondo & Associates into Saipan International Airport’s concession programme and leasing strategies. That study recommended a choice of three options: a successor master concession agreement; a pure duty free retail concession; and a duty free retail concession on an upfront payment basis to help fund the airport’s capital needs.
As reported, a successive master concession may be granted for up to 20 years. DFS’s existing master concession agreement was a successor to an agreement executed in 1985 which expired in 2005. The next agreement, executed in 1997, extended the term to 2015. Under the master agreement, DFS pays CPA 18% of gross sales.
DFS, especially Co-Founder and still significant minority shareholder Bob Miller, considers Saipan one of its historic heartlands. Importantly, the retailer has played a critical role in developing Saipan’s tourism industry, notably in financial support of the airport’s development in the early days. In 1974 DFS made a US$6 million rental prepayment which funded critical airport infrastructure.
 |
DFS has been an ever-present force in Saipan since the early 1970s and today has thriving airport and T Galleria operations there |
