Duty free awarded as it was always going to be awarded

1 06 2019

It was some time ago that there were mutterings that football oligarchs at King Power might lose their lucrative monopoly on duty free. Other retailers complained and mumbled about competing with King Power for the monopoly post-2020, when King Power’s contract ended. Others claimed that money owing to the state was going missing but the courts disagreed.

The junta even went back and forth a bit on the new concession and there were stories about auctions and big foreign bidders.

Now we haven’t followed this story particularly closely, but we did notice the story that Airports of Thailand Plc that the “King Power Group has won the bid to operate duty-free shops at Suvarnabhumi airport for another 10 years and six months and another to run commercial space at the airport…”. That seems to us like no change at all, despite the grinding of teeth that seems to have gone on.

AoT executive vice-president Wichai Bunyu said there were just three contenders, and that King Power blitzed the others “in terms of financial returns.” He said” “The promised return is higher than what we’ve received and exceeds our expectations…”.

The other contenders were a group led by Bangkok Airways and the Royal Orchid Hotel (Thailand) company.

Having held the monopoly at Suvarnabhumi since the airport opened in 2006, it will be 2031 when this concession finishes. Not bad when it is considered that tourist numbers have ballooned from 11.5 million in 2006 and are forecast to reach almost 80 million by 2030.

The very same day this concession was awarded, “King Power Suvarnabhumi Co, another subsidiary of the group, won the bid to develop and operate commercial areas at the international gateway, also for 10 years and six months” over Central Pattana Plc. AoT’s Wichai gave exactly the same reasons for this concession being awarded to King Power. He added that the “overall commercial space covered 22,000 sq m…”.

Other concessions are coming up for duty-free outlets at Phuket, Hat Yai and Chiang Mai airports, and King Power wants those too.

King Power’s Srivaddhanaprabha has grown hugely wealthy on duty free. It has also been able to back some political wheelers and dealers, most notably Newin Chidchob of the Bhum Jai Thai Party and has been skilled at making royal contacts. That all helps the group and family get wealthier.


Actions

Information