International and local consortiums have been invited to submit proposals to operate duty-free shops at airports in the kingdom. However, doubts have been raised about their appeal as the kingdom is already a tax-free environment.

Twelve groups are prequalified for the establishment, operation and management of the five duty-free shops at international departure lounges in Jeddah (two), Riyadh (two) and Dammam (one). However, it is unclear how many will bid and some prospective bidders have raised concerns over the potential returns on investment.

'We will not be bidding as everything is already tax-free,' says an official at one of the prequalified firms. 'We feel there are better opportunities around.'

The 10-year concession contract will cover the financing, building and fitting out of the shops and the operation of warehouses close to the shops and landside duty-free bonded warehouses. The UK's Concession Planning International is the consultant (MEED 14:7:06).

The scheme is the latest attempt by the General Aviation Civil Authority to bring the private sector into the kingdom's aviation industry. It recently broke the monopoly enjoyed by flag-carrier Saudi Arabian Airlines in the kingdom by awarding two new licences to operate airlines. It has also awarded two major build-operate-transfer schemes at King Abdulaziz International Airport in Jeddah.