A STUDY ON COMMERCIAL SPACE MANAGEMENT AT CALICUT

INTERNATIONAL AIRPORT

CALICUT-KERALA

Project work Submitted in partial fulfillment of the requirement for the award of
the degree
MASTER OF BUSINESS ADMINISTRATION
In
AVIATION MANAGEMENT

Submitted By
Afham Abdul Rasheed
Reg No:-0901309003
Under the guidance of
Mrs. Maria Diana

HINDUSTAN INSTITUTE OF TECHNOLOGY AND SCIENCE

HINDUSTAN UNIVERSITY
PADUR-CHENNAI
JULY-2010

1
 DECLARATION

I hereby declare that the report submitted by me to the department of

Management studies, HIDUSTAN INSTITUTE OF TECHNOLOGY AND
SCIENCE in partial fulfillment of the requirement of degree of Master of Business
Administration in Aviation Management is a record of original work done by me.
The observations and suggestions in the report are based on information collected
by me.
Further, I declare that I have not submitted this report in full or part of any
other university or any other management institutes.

Yours truly,
AFHAM ABDUL RASHEED

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 ACKNOWLEDGEMENT

At first I would like to thank almighty God for giving me power and patience
to complete the project report in a successful way.
I happily record here my abiding gratitude to Prof. Srinivasan, our beloved
HOD of Department of Management Studies, Hindustan Institute of Technology
&Science, Chennai.
I happily record here my abiding gratitude to Mr. Krishna Kumar, Manager of
Terminal Department, Calicut International Airport for providing me all necessary
facilities carrying out this project report.
I am very much thankful to . J.D.Jadhav, Assistant General Manager, Terminal
Department and Mr. Shoukathali Airport Manager, Calicut International Airport
My deepest sense of gratitude is to Ms Maria Diana, Lecturer, Hindustan
Institute of Technology &Science, Chennai. Without whose guidance at each and
every stage, this project would not have become a reality.
I would also express my thanks to my parents, and all person who have helped
me in the successful completion of this project work

AFHAM ABDUL RASHEED

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 CONTENTS

S.No PARTICULAR PAGE

Part I
Introduction 5
Industry Profile 6
Company Profile 8

Part II COMMERCIAL SPACE MANAGEMENT OF AAI

INTRODUCTION, OBJECTIVE, SCOPE, TARGET 14

ACCOUNTABILITY AND RESPONSIBILITY 17

MONITORING OF TARGET ACHEIVEMENT & PERFORMANCE 17

1 IDENTIFICATION/CREATION OF COMMERCIAL 18

FACILITIES

2 EARMARKING THE FACILITY 19

3 SELECTION CRITERIA 20

4 REQUIREMENT OF DOCUMENTS 24

5 SALE OF TENDER 26

6 RECEIPT OF TENDER 30

7 NEGOTIATION PROCEEDINGS AND PROCEDURES 30

8 HANDING OVER OF SITE/FACILITY 31

9 MONITORING OF QUALITY OF SERVICE/PAYMENT 32

PERFORMANCE

10 PROCEDURE FOR TAKING ACTION AGAINST DEFAULTING

LICENSEE 35

11 TEMPORARY EXTENSIONS 36

12 RENEWAL/TERMINATION NOTICE 37

ANNEXURE 39

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 INTRODUCTION

An airport is a location where aircraft such as fixed-wing aircraft,

helicopters, and blimps takeoff and land. Aircraft may be stored or maintained at
an airport. An airport consists of at least one surface such as a runway for a plane
to take off and land, a helipad, or water for takeoffs and landings, and often
includes buildings such as control towers, hangars and terminal buildings.

Larger airports may have fixed base operator services, seaplane docks and
ramps, air traffic control, passenger facilities such as restaurants and lounges, and
emergency services. The terms aerodrome, airdrome, airfield, and airstrip may also
be used to refer to airports. In some jurisdictions, the term airport is used when the
facility is licensed as such by the relevant government organization (e.g. the U.S.
Federal Aviation Administration (FAA). Elsewhere the distinction is one of
general appearance. Other jurisdictions define an airport as having the customs
offices etc. expected of a port, though the more general term is airport of entry.

Most of the world's airports are owned by local, regional, or national

government bodies who then lease the airport to private corporations who oversee
the airport's operation. In India the airports are owned by both public sector and
private sector. There are 8 airports owned by private companies and others are
being managed by the govt. of India through Airport Authority of India (AAI).

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 INDUSTRY PROFILE

The history of civil aviation in India started with its first commercial flight
on February 18, 1911. It was a journey from Allahabad to Naini made by a French
pilot Monseigneur Piguet covering a distance of about 10 km. Since then efforts
were on to improve the health of India's Civil Aviation Industry. The first domestic
air route between Karachi and Delhi was opened in December 1912 by the Indian
State Air Services in collaboration with the Imperial Airways, UK as an extension
of London-Karachi flight of the Imperial Airways.

The aviation industry in India gathered momentum after three years with the
opening of a regular airmail service between Karachi and Madras by the first
Indian airline, Tata Sons Ltd. However this service failed to receive any backing
from the Indian Government.

At the time of independence nine Air Transport Companies were operational

in the Indian Territory. Later the number reduced to eight when the Orient Airways
shifted its base to Pakistan. The then operational airlines were Tata Airlines, Indian
National Airways, Air service of India, Deccan Airways, Ambica Airways, Bharat
Airways and Mistry Airways.

With an attempt to farther strengthen the base of the aviation sector in India,
the Government of India together with Air India (earlier Tata Airline) set up a joint
sector company, Air India International, in early 1948. With an initial investment
of Rs. 2 crore and a fleet of three Lockheed constellation aircrafts, Air India started
its journey in the Indian aviation sector on June 8, 1948 in Mumbai (Bombay)-
London air route.

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 For many years since its inception the Indian Aviation Industry was plagued
by inappropriate regulatory and operational procedures resulting in either excessive
or no competition. Nationalization of Indian Airlines (IA) in 1953 brought the
domestic civil aviation sector under the purview of Indian Government.
Government's intervention in this sector was meant for removing the operational
limitations arising out of excess competition.

Air transportation in India now comes under the direct control of the
Department of Civil Aviation, a part of the Ministry of Civil Aviation and Tourism
of Government of India.

Aviation by its very nature constitutes the elitist part of our country's infrastructure.
This sector has substantial contribution towards the development of country's trade
and tourism, providing easier access to the areas full of natural beauty. It therefore
acts as a stimulus for country's growth and economic prosperity.

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 COMPANY PROFILE

Calicut International Airport (IATA: CCJ, ICAO: VOCL), also known as

Karipur Airport, is an International Airport serving the city of  Kozhikode
(Calicut), Kerala, India. It is a hub for Air India Express.

The airport is located 26 km (16 mi) from the Kozhikode Railway Station
and 27 km (17 mi) from the town of Manjeri, with the closest railway station being
at Feroke. It is the 12th busiest airport in India in terms of passenger traffic and
11th in cargo handling.

Calicut Airport is one of the three international airports located in Kerala.

Calicut airport was given the status of international airport on 2 February 2006,
thereby paving the way for the improvement of the infrastructure there for
handling international flights. The airport is one among the three airports in India
that has a table top runway (others being Mangalore and Lengpui) which creates an
optical illusion that requires a very precise approach from the pilot.

The airport was sanctioned after a long period of struggle which began in
1977 under the leadership of freedom fighter K. P. Kesava Menon. Funds were
collected from Gulf Malayaly’s for its development in the 1990s when the Union
Government said it did not have funds. To raise the funds needed for airport
development, the Malabar International Airport Development Society was formed.
Later major developments of facilities, such as extension of runway from 6,000 ft
(1,800 m) to 9,000 ft (2,700 m) to facilitate operation of wide-body aircraft were
carried out with loans from the Housing and Urban Development
Corporation (HUDCO). A user fee was also introduced to pay back the loans.

8
 Since then, facilities at the airport have been greatly increased by
the Airports Authority of India. There has also been a steady increase in the
volume of passenger traffic from the airport. The Airport also has a steady increase
of cargo handling.

Recent renovation, upgrades and expansion

Due to the recent billion-rupee upgrade of existing facilities, the

infrastructure at Calicut International Airport has received foreign airlines.

An inline baggage system, the first of its kind in India that will do away with
the separate X-raying of baggage, is being installed. Several airlines have sought
night parking facility at the airport, which has presently 10 parking bays.
Permitting night parking at the airport will greatly improve air
connectivity. Airports Authority of India (AAI) will provide
three aerobridges (plus options for two more) at the airport which will help
passengers directly enter the terminal while alighting from an aircraft. A
15,000 m2 (160,000 sq ft) international arrival terminal has been opened to
passengers, similar to the spacious modern international departure terminal that
became operational on 14 May 2007. Three user-friendly conveyor belts are
installed at the arrival terminal and 800 stainless steel chairs for passengers in the
security-hold area. Escalators and elevators are also installed inside and outside the
terminal building. Facilities for the passengers and visitors like fast-food counters,
luggage room, jewellery shop, handicraft stall, traffic direction poles, restaurant,
and cyber café are also opened at the airport.

The plush and practical interiors and convenient facilities, including leather
sleeperettes for transit passengers, have definitely brought the airport to

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international standards; a great improvement from the stuffy and cramped area it
once was.

Domestic carrier Jet Airways has being granted permission to operate some

international routes, Doha and Muscat. The airline has started its operation from
Calicut International Airport from 23 January 2008. It is expected that Deccan will
soon follow the path of Jet Airways in August 2008 when it will have completed
five years of flying experience to be eligible for international routes.

 Lead-in lighting system

The approach to Calicut airport runway is surrounded with hills and valleys.
The approach funnel area of the runway 28 is a 30 m (98 ft) to 70 m (230 ft) deep
undulated valley up to a distance of 6,000 m (20,000 ft), immediately following the
tabletop runway of 2,860 m (9,380 ft) long. This terrain needs a special type of
Approach guidance lighting system to enhance safety for aircraft operations both
during night and poor visibility conditions. Airports Authority of India have
provided runway lead-in lighting system for the first time in India at Calicut airport
as per the recommendations of the Directorate General of Civil Aviation, at a cost
of Indian Rupees 17,000,000.

The lead-in lighting system is a positive visual guidance to the pilot along a
specific approach path for reasons such as avoiding hazardous terrain, etc. It
facilitates the pilot to follow the desired approach path. The system is designed in
such way that one group of lights is sighted from the preceding group of lights,
finally leading the aircraft to the proximity of threshold of the runway. As per
standards the runway lead-in lighting system, consist of groups of lights positioned
on the desired approach path at an interval of not more than 1,600 m (5,200 ft) on

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the extended approach path of the runway. The desired approach path could be
curved or straight line.

The lead-in-lighting system at Calicut airport provides desired approach path

in the extended centre line of the runway and the group of light units are installed
on the top of the 30 m (98 ft) high lattice towers at four locations: 1,820 m
(5,970 ft), 3,123 m (10,246 ft), 4,271 m (14,012 ft) and 6,193 m (20,318 ft) from
the threshold of runway 28. Each group of light consists of three sequential
flashing lights in linear configuration. The lead-in-light units are powered
through solar power system at each tower locations with battery banks
and inverters. The lead-in-light system is planned with radio control units for
remote operation. The System operates in three pre-selected intensity level at a
flashing rate of 120 flashes per minute to meet the various ambient conditions.

The system has been put into service for night operations since October
2003. The radio frequency control for remote operations of the system from air
traffic control tower is also planned.

Supplementing the above lead-in lighting system, solar-powered aviation

obstruction lights are also provided at eight critical hilltops around the Calicut
Airfield.

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 Airlines and destinations

Airlines Destinations
Air Arabia Sharjah
Air India Dammam, Jeddah, Kochi, Riyadh, Trivandrum
Abu Dhabi, Al Ain, Bahrain, Doha, Dubai, Kochi,
Air-India Express
Kuwait, Mangalore, Mumbai, Muscat, Salalah, Sharjah
Bahrain Air Bahrain
Emirates Dubai
Etihad Airways Abu Dhabi
Indian Airlines Coimbatore, Delhi, Mumbai
Indian Airlines Bahrain, Dubai, Kuwait, Sharjah
JetLite Mumbai
Kingfisher Airlines Bangalore
Oman Air Muscat
Qatar Airways Doha
Saudi Arabian Airlines Jeddah, Riyadh, Dammam
Nas Air (Saudi Arabia) Riyadh (Starting 1st July)

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 Commercial Space Management of
AAI

INTRODUCTION

Consequent upon the formation of Airports Authority of India on 1.4.95 on

merger of the International Airports Authority of India and the National Airports
Authority, the need for having a unified Commercial Manual was considered
necessary. Accordingly, the unified Commercial Manual was prepared by a duly
13
constituted Committee after taking into account the views of all the concerned
Departments/Regions/Airport Directors and after the approval of AAI Board
Circulated to all the Regional Executive Directors and Airport Directors of the
International airports. The Manual has been subsequently reviewed after taken into
consideration the views of REDs / Airport Directors of the International
Airports and the review in the Manual has approved by AAI Board in its 67th
Board Meeting held on 9.5.2003. AAI Board has also decided that any further
amendment to the Commercial Manual should be brought to the Board with the
recommendations of Commercial Advisory Board for its approval.

This deals with allotment of the built up space including Hangars and other
Revenue Contracts in respect of all the Domestic and International Airports. It does
not deal with the allotment of land and matters related to other infrastructures
constructed on AAI’s land by licensees like; hotels/motels/flight kitchens/flying
clubs/hangars etc. The guidelines and methodology required beginning from
earmarking the facility, fixing the MRLF and inviting and finalizing the
Commercial Tenders have been indicated in the Manual after carefully considering
the practical aspects suggested by Regions/Airports/CAB. While preparing /
reviewing this Manual all care has been taken to group the airports on the basis of
present revenue and the revenue potential expected in future. Different aspects of
the revenue contracts have been covered exhaustively.
However, in case, any aspect is not covered in the guidelines, the same may
be brought to the notice of Executive Director (Commercial) at CHQ for review
and approval by the Competent Authority. In order to judiciously take decisions in
generating non-traffic commercial revenue, ample provisions have been made and
leverage given for making local level decisions by involving the Regional
Commercial Advisory Committee.
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This Manual supersedes all instructions and guidelines indicated in the previous
Manuals of IAD/NAD.

OBJECTIVE
• Maximization of the non-traffic revenue of AAI by:-
- Identifying new commercial revenues/optimum utilization of available space in
the terminal buildings at a properly selected location.
- Introduction of innovative commercial ventures on experimental basis without
call of tenders for a short term upto one year and by regular contracts on a long
term basis through call of tenders.
- Completion of the tendering process for a commercial contract /facility by
adhering to a specified time schedule.
• Monitoring of the performance of the commercial contracts.

STRATEGY
Broadly, the following strategies have been laid down to achieve the above
objectives:
• Procedure for identification/creation of a new commercial facility.
• Procedure for tendering of a commercial facility at airport/civil enclave in a
transparent manner
• Procedure for the opening and evaluation of Technical/Financial Bids.
• Time schedule in processing the tenders.
• Defining the area and scope of the responsibilities of various concerned
departments.
• Encouraging competition amongst the genuine parties by fixing the standard
norms of gross turnover related experience/eligibility criteria.
• Adhering to pre-tender/post-tender conditions.
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• Setting up procedures for monitoring the performance of the licensees.

SCOPE
• Allotment of built up space at airports and civil enclaves to airlines, regulatory
agencies and for facilitation purposes without call of tenders.
• Licensing of trading concessions at airports and civil enclaves through call of
global tenders, limited tenders, open tenders and negotiations, like Duty Free
Shops/shops/catering services /advertisement rights /car parks /visitors entry
fee/vending machines/transport facilities/money exchange etc. etc.

TARGETS
• In case of airports/civil enclaves under the control of NAD, Airport Directors
may take the stock of the existing commercial facilities vis-à-vis, the existing
revenue and fix target for next 3 to 5 years, which should be atleast 25% to
100% increase depending upon the traffic growth and commercial potential of the
particular airport.
• Airport Directors (APDs) of 5 International Airports under the control of IAD
may also take the stock of the existing commercial facilities vis-à-vis, existing
revenue from all such facilities and fix target for the next 5 years for enhancing
non-traffic revenue. In case of Mumbai, Delhi and Chennai Airports, the increase
could be 50% to 100% and for remaining airports the increase could be 25% to
100%.
• The above suggested target may be achieved by creation of new commercial
facilities as well as timely renewal of the existing contracts.

MONITORING OF TARGET ACHEIVEMENT & PERFORMANCE

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• Regional Executive Directors would monitor and review the performance as well
as the quality of service of the commercial licenses granted at the airports under
their control.
• Member In charge of Commercial Dept would monitor and review the
performance as well as the quality of service of the commercial licenses awarded at
the IAD Airports.

ACCOUNTABILITY AND RESPONSIBILITY

Regional Executive Directors/Airport Directors shall be accountable for
monitoring and reviewing the performance of the commercial contracts in the
following areas:-
• To achieve the targeted revenue from commercial facilities at airports under their
control.
• Timely tendering action, execution of agreement and renewal of the license
before the expiry of its term.
• Payment performance of the licensees. The quarterly reports of defaulters may be
sent to Commercial Department, CHQ.
• Compliance of the terms and conditions of the licence agreements by AAI..
• Compliance of the terms and conditions of the licence agreement by Licensees.
• Compliance of the service standard by the Licensees as per norms lay down by
AAI.
• Maintenance of a separate dossier of performance in respect of each licensee.
• Action against the defaulting licensees.
• Submission of quarterly reports to Member In charge of Commercial Dept at
HQs. with regard to the performance of the licensees and action took report.

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• Quarterly report to Member In charge of Commercial Dept. at CHQ with regard
to the creation of new facility vis-à-vis percentage increase in the non traffic
commercial revenue.

1) IDENTIFICATION/CREATION OF COMMERCIAL
FACILITIES
1.1 New commercial facilities are to be created by:
(a) Creation of new space/new building.
(b) Requirement/proposals from within AAI.
(c) Requirements projected by user agencies/other sources.
(d) Outcome of passengers’ opinion surveys conducted.
(e) Space becoming available due to change/shift in operation.
(f) Feedback received from passengers/visitors passing through airports.
(g) Proposals received from concessionaires.
(h) Creation of innovative commercial facility due to all-round technological
development in the aviation sector.
1.2 Actions to be taken:
(a) Detailed Drawings of a building (new/re-modified/expansion) prepared
and approved by the Planning Department are to be sent to Department of
Commercial at Hqrs. The Commercial Dept. is to identify the space/location
of the facilities in consultation with REDs, Airport Director of the concerned
airports, Executive Director
(Operations), Executive Director (Land Management) and Executive
Director (Architecture) or Executive Director (Planning), as may be
considered appropriate.
(b) Feasibility of commercial proposals/ requirements is to be evaluated for:

18
 i. Viability of the proposal from physical location and clearance
from planning point of view.
ii. Usefulness of the service.
iii. Financial viability - (Internal rate of return on capital
investment atleast @ 12% for commercial proposals). Its
impact on other related existing facilities, if any.
iv. Security Clearance, wherever necessary.
v. Operational Clearance, wherever necessary.
vi. Clearance from regulatory agencies, wherever necessary.
1.3 New commercial facility is to be got approved as per prevailing Delegation
of Powers (DOP).
1.4 The proposal is to be graded into one of the categories viz.:
(a) Mandatory
(b) Aviation/safety related
(c) Facilitation
(d) Purely commercial and unforeseen facilities/activities.
(e) Employees welfare-cum-commercial.

2) EARMARKING THE FACILITY

2.1 Specify physical dimensions and precise location of the proposed
scheme/facility. If a building, then access, utilities required, area of the plot is to be
identified.
2.2 Where it is a part of the Master Plan, indicate the purpose for which it is
earmarked.
2.3 (a) REDs/APDs/Station In-charge are to ensure site clearance for new
Contracts.

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(b) In respect of existing facility, which is proposed for tendering, ensure that site
is ready in all respects and free from all encumbrances.
2.4 REDs/APDs/Station In-charge are to ensure ‘No Objection Certificate’ of all
the concerned Departments within AAI viz. Planning, Engineering (Civil &
Electrical), Operations (including Fire & Electronics), as may be considered
appropriate. If required, ‘No Objection Certificate’ of other concerned
Departments like; DGCA, BCAS, Police, Security, Health and any other local
authorities within the city, as may be considered appropriate, is to be obtained.
2.5 REDs/APDs/Station In-charge are to ensure for the availability of water,
electricity and outlet for disposal of water, removal/disposal of garbage and
service lift, other basic facilities etc., as the case may be. (AAI is to provide
water/electricity/sewerage disposal at a single point at the site of the trading
facility. The licensee is required to undertake further distribution of the facility
at his own cost).

3) SELECTION CRITERIA
3.1 MANDATORY (AGENCIES WITHOUT CALL OF TENDER)
(a) Regulatory Agencies and essential services.
(b) Airlines
(c) Facilitation

(a) REGULATORY AGENCIES/ESSENTIAL SERVICES

Immigration, Customs, Health, Security, Meteorological Deptt. and
Nationalised Banks for collection of FTT & Customs Duty.
(Space rent and electricity as applicable and decided by AAI to relevant categories
for the area occupied shall be applicable and separate electric meters are to be

20
provided in each case. However, for the public utility areas viz. space allotted to
Govt. Depts. like; Customs, Immigration, Police, Plant
Quarantine, Health etc. for the purpose of check-in-counters, appraisal areas, no
rent and electricity is to be charged)

(b) AIRLINES (No tender action is required)

The airlines may be categorized as (i) all operating airlines; (ii) Regular Air-
Taxi Operators and (iii) Non-Scheduled Operators.
The quantum of space is to be determined keeping in view the traffic/operation of
an operator. Dep’t of Commercial at airport is to maintain proper record/register of
the proposals received from airlines for allotment of space and a separate register is
to be maintained for each category of airline. The allotment of space to the airlines
is to be made on first-come-first-serve basis and subject to the availability of space.
However, overriding priority may be given to the operating airlines/regular air-taxi
operators over the non-scheduled operators.
(c) FACILITATION (WHERE THE COMMERCIAL INTEREST OF THE
AGENCY OPERATING THE FACILITY IS NOT INVOLVED
(No tender action is required. Normal prevailing license fee for space to be
charged)
Tourist Information Counters (i.e. Govt. of India Tourist Dep’t., I.T.D.C., State
Govt. Tourist Dep’t. where the airport is located, Accredited
Association of Press Reporters, Postal and Telegraph, Telecommunications,
Nationalized Banks (for the purpose of Duty collection or normal banking facility
to staff), Railways Reservation and any other similar facility.
3.2 PURELY COMMERCIAL FACILITIES
I. GLOBAL TENDER

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 This will apply to Duty Free Shops or any other commercial facility, as may be
determined by the Management of AAI.
II. LIMITED TENDER
Where the commercial contracts are to be operated through

Exclusive Branded Suppliers/manufacturers and

Government Authorized Agency, such as for;

Cellular Phone services, ATM, Car Display and other

exclusive branded services.

III. NEGOTIATED LICENCES
This will apply to:
Handicraft shop to State Govt. Emporium as well as State Govt. owned products in
the State Capital, where the airport is located (e.g. allotment of
counter to HPMC at airports in the State of Himachal Pradesh (HP), allotment of
Handicraft Shop to Delhi Emporium at IGI Airport, allotment of shop to UP
Emporium at Lucknow airport and so on) and Khadi Village & Industries
Commission (KVIC) at any of the airports.
However, Chairman, AAI may exercise his powers for allotting a trading
concession at an airport to any Central/State Govt. Dep’t. On negotiated terms.
IV. OPEN TENDERS
This will apply to:
Catering facility located outside the Terminals, Indoor and Outdoor
Advertisement Rights, Advertisement on passengers’ baggage trolleys,
advertisement on flight information display system, construction & management of
public convenience vis-à-vis advertisement rights,
Installation of Vending Machines, Shops other than Duty Free, Transport facility,
Left Luggage, Car Park, Weighing Machines, Payphones,
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Dormitory, Photostat, Packer service, Communication service, Hotel
Reservation, Money Exchange, Insurance Counters, Grass Cutting and
Agricultural Rights and any other contract not specified in the list of contracts
mentioned under the head of ‘GLOBAL TENDER’ and ‘LIMITED TENDERS’
above as well as any other commercial contract as may be decided by the
Competent Authority from time to time.
(a) Wide publicity would be given to attract fair competition.
(b) No press notification is to be issued for a contract carrying annual value upto
Rs. 2, 40,000/- in case of airports under Group ‘A’,
Rs.1,20,000/- in case of airports under Group ‘B’ and Rs.60,000/- in case of
airports under Group ‘C’ & ‘D’. The mailing list of the parties
having experience in the particular field of activity with due approval of RCAC is
to be maintained and updated from time to time by Dep’t of Commercial at airport,
in addition to displaying the NIT on Notice
Board for the purpose of inviting tenders in such cases.
However, the documents concerning relevant experience as well as EMD are to be
obtained.
3.3 EMPLOYEES WELFARE-CUM-COMMERCIAL
This will apply to the facilities provided in the Housing Colonies like;
General Stores, Chukki Shops, Meethai & Bakery Shops, Payphone, Milk
Booth, Vegetable Shops, Cable T.V., Chemist Shops etc.
(Licence for the above facilities can be granted without call of tenders to AAI
Employees Co-operatives, Kalyanmai. In case of non-availability of such
establishments, licence is to be granted by circulation of the NIT as per mailing list
of parties and by placement of NIT on Notice Board etc.)
3.4 RCAC is also authorised to grant licence on experimental basis upto a
maximum of 12 months for innovative commercial venture, if necessary by
23
entering into short-term agreements/contracts. Special survey could be carried out
for use on such facilities for future tendering, if required before the expiry of the
experimental period of 12 months. Care is to be taken to ensure that timely action
is taken for tendering/closure of the temporary contracts.
3.5 Adequate number of coin/card operated PCO/STD/ISD can also be provided
through MTNL/C-DoT/BSNL etc.
4.6 The licence for Drinking Water and common beverages of Tea/Coffee can also
be granted directly to the branded manufacturers (to be operated by them directly
without involvement of any franchise at ‘Fair Price’ on ‘No Profit No Loss’ basis).
However, only logo and name of the manufacturing firm should be indicated.

4) REQUIREMENT OF DOCUMENTS
4.1 Envelope ‘A’ (Technical Documents)
 Tenders where MRLF is more than Rs.0.20 lacs per month but less than
Rs.0.50 lacs per month, the following technical documents are required to be
furnished by the tenderer(s) in Envelope ‘A’:
(a) Relevant experience as per the terms and conditions of Notice Inviting
Tender.
(b) Affidavit declaring assets details and liabilities details. The net worth
may not be less than the annual quoted value.
(c) Partnership Deed in case of partnership firm.
(d) Earnest Money Deposits.
(e) No Dues Certificate.
 Tender where reserve price is more than Rs. 0.50 lacs per month, the
following documents are required to be furnished by the tenderer(s) in
Envelope ‘A’:
(a) Relevant experience as per the terms and conditions of Notice Inviting
24
Tender.
(b) Last financial year's income-tax return.
(c) (i) Profit & Loss Accounts/Balance Sheet/Annual Report as may be applicable
for the last completed financial year duly certified by the Chartered Accountant or
any other authority approved for this purpose.
(ii) In case of Registered Company, Annual Report is to be submitted.
(d) Assessment Order for last completed assessment. In case no assessment is
completed, an affidavit to this effect should be furnished.
(e) Attested copy of Memorandum and Articles of Association in case of
Registered Companies.
(f) By laws in case of cooperative societies.
(g) Partnership Deed in case of Partnership firm.
(h) Earnest Money Deposits.
4.2 In case of contract carrying MRLF of Rs. 12 lacs per annum and above,
solvency certificate equal to an amount of Security Deposits calculated on
MRLF is to be furnished from a Nationalised/Scheduled Bank (Annexure
XVIII).
4.3 Envelope ‘B’ (Financial Documents)
(a) 5.3.1 Department of Commercial to clearly spell out all the terms and
conditions and other requirements of the tenders. Tenderers are not to put
any condition either in Envelope ‘A’ or in Envelope ‘B’, failing which their
tender shall be liable to be rejected.
(b) Tenderers are to indicate the number of documents they had submitted as a
part of their Technical/Financial Bid. Tenders should be signed/initialed on
each page of the documents in Envelope ‘A’ & ‘B’.
4.4 Sealed Envelope ‘A’ (Technical Bids) and sealed Envelope ‘B’ (Financial
Bids) are to be put and sealed in a separate ‘Master Envelope’.
25
4.5 In case the documents submitted by the tender are false, incorrect, the tender
will be liable to be rejected. The financial viability as per prescribed criteria, if not
fulfilled, the tender can be rejected.

5) SALE OF TENDER
5.1 Tender documents are to be sold by the Commercial Manager/Sr. Commercial
Manager or any other Officer heading/looking after the functions of the
Commercial Dep’t at the respective Airport/Station.
5.2 One party is to be sold only one tender document for an identical licence in a
separate designated building at an airport. In this case, where the sole proprietor of
more than one firm is the same person, it will be considered as one legal entity for
the purpose of one tender.
5.3 In addition to the Notice Inviting Tenders being published in various
Newspapers for Commercial contracts, the complete tender documents along with
the application form is required to be published on the Website of AAI. The parties
making use of this website shall not be asked to obtain any other related documents
by Department of Commercial manually for the purpose of participating in the
tender process. All the tender documents up-to-date should remain available on the
Web site and shall be equally legally valid for participation in the tender process as
manual documents obtained from department through manual process.
The Complete application form should be made available on the website for
purpose of down loading and application made on such a form shall be considered
valid for participation in the tender process.
The parties shall pay the prescribed cost of tender documents by cash/draft on or
before the last date of submission of the application form & bid documents.
In case the party intends to purchase the tender document personally, tender
documents are to be sold by Commercial Manager/Sr. Manager or any other officer
26
heading/looking after the functions of the Commercial Department at the
respective Airport without insisting on any document.
5.4 In case of tenders which are to be invited for the commercial facilities at the
Airports/Civil Enclaves controlled by NAD, no party is eligible for consideration,
(a company/firm or an individual) falling under the following categories :
(a) Having outstanding dues in respect of any of the International/Domestic
Airports/Civil Enclaves controlled by NAD in a particular region where the tenders
have been invited except where the dues pertain to current month’s licence fee.
(b) Dep’t of Commercial at RHQ is to maintain database in respect of all the
commercial contract at airports under their region including the details of
outstanding dues against the different licensees.
The details may be shared between the regions and with the Airport Director of
IAD International Airports as well as Dept of Commercial (CHQ) at short notice
on request.
5.5 In case of tenders which are to be invited for the commercial facilities at the 5
International Airports controlled by IAD, no party is eligible for consideration
(A firm or an individual) falling under the following categories:
(a) Having outstanding dues in respect of 5
International Airports as a whole except the dues pertaining to current months
licence fee collectively.
(b) Commercial Dep’t at 5 International Airports are to maintain complete details
of the different commercial contract including the outstanding dues against the
concerned licensees. The details may be shared with the Commercial Dep’t at other
International Airports (IAD), REDs & Dep’t of mCommercial at CHQ, at short
notice on request.

27
5.6 In all conditions as mentioned sub-para 7.4 & 7.5, a declaration on Non-
Judicial Stamp Paper of Rs.10/- duly attested by Notary Public is also to be
obtained from
the tenderer indicating (i) the details of their contract at all the airports of AAI as a
whole; (ii) the liability of payment of disputed/un-disputed dues of AAI.
5.6, the award of contract to the successful tenderer at any of the airports shall be
subject to the payment of undisputed dues (not forming a part of an arbitration
case) of AAI as a whole.
5.7 The disputed dues referred to an arbitrator for adjudication as per terms and
conditions of the licence agreement may not form a part of the outstanding dues for
consideration for the tender. However, the party is not eligible for the contract in
case Arbitrator has pronounced the award in favour of AAI, unless directed by a
Court of Law.
5.8 In addition to above, any party (a firm or an individual) falling under the
following categories is not eligible for consideration of the tender:
(a) De-barred/black listed by CBI or AAI or
Undertakings/ Departments like; Railways, Defense, or any other Department of
Govt. of India,
State Govt. Dep’t of Commercial at RHQ / Airports is to maintain records of such
debarred/black-listed parties in consultation with Vigilance Dep’t At CHQ. In this
regard, Dep’t of Vigilance at CHQ may forward an updated list to the Regions /
Airports.
(b) Parties facing action under PPE Act, with AAI.
(c) Parties either an individual or a business establishment, who has been ordered
by a Court of

28
Law to pay the outstanding dues of AAI at any of the airports as a whole and has
not paid such dues to AAI. The associated firms/subsidiaries of such defaulting
party shall also not be eligible for consideration of tender.
[A declaration to the effect he does not fall under the categories (a), (b) & (c)
above is to be furnished at the time of submitting the tender.]
5.9 In case the information is found to be incorrect/false, tender of such party is to
be rejected by giving the reasons and Earnest Money Deposit (EMD) forfeited
besides debarring the participation of such party in
AAI’s tender for a specific period to be decided by the
Authority authorised to approve the tenders.
5.10 The consequential penal action for furnishing false/incorrect information is
also to be indicated in the NIT.
5.11 Proper record of tenders downloaded and sold manually is to be maintained in
a specified register duly authenticated by the Officer heading the Commercial
Department indicating the following information:
(a) Serial Number.
(b) Name and address of the party who submitted the tender documents.
(c) Whether tender documents downloaded from the
Website or purchased directly from the department.
5.12 The Register as above should not be signed/authenticated by the tenderer or
his representatives. However, reasons for not issuing the tender documents are to
be indicated to the party on request in writing.
5.13 The signature /authentication of the party purchasing the Tender Documents
is also to be taken on the letter of application.
5.14 Cost of Tender Document (Non-refundable)
(a) Upto Rs.5 lacs per annum Rs.250/-
(b) Rs.5 lacs to Rs.10 lacs per annum Rs.500/-
29
(c) Rs.10 lacs to Rs.50 lacs per annum Rs.3000/-
(d) Above Rs.50 lacs per annum Rs.10000/-
(e) Cost of tender documents is to be refunded to the concerned party in case AAI
decide to cancel the tenders before its receipt / opening due to administrative
reasons.

6) RECEIPT OF TENDER
6.1 Date and time prescribed for sale/closing/opening of tenders should be adhered
to.
6.2 Tender box to be kept in a secured place preferably in the chamber of Head of
Commercial Department. The tender received before due date and time by post is
to be put into the Tender Box.
6.3 Lock of tender box to be sealed.
6.4 Closing of tender box on prescribed time (closing to be signed by concerned
officer and in the presence of one or two participants, if available) and the opening
in the tender box is to be closed by pasting it.

7)NEGOTIATION PROCEEDINGS AND PROCEDURES

CVC’S guidelines as contained in circular No.98/dr. ORD/1 dated 24.8.2000
(Annexure XIX) applicable to expenditure contracts should be followed in respect
of Revenue Contracts also in the case of H1. The following procedure is to be
followed:
7.1 As far as possible negotiations are to be avoided. In exceptional cases,
negotiations with the highest tenderer only may be carried out within the broad
ambit of the tender conditions. All the conditions, which have to be negotiated /

30
withdrawn, are to be decided by RCAC/CAB/other authority competent to accept
the tenders as per DOP.
7.2 Negotiations are to be carried out only with the authorised representatives of
the highest tenderer after having obtained the authorization letter in writing.
7.3 Negotiations are to be carried out by a Committee comprising the Head/In
charge of Commercial Department, representative of Department of Finance and
one representative from any other Department. The Committee is to be appointed
by the CAB/Member-in-charge of Commercial/ REDs/Airport Director

(IAD)/Domestic Airports/Station In-charge at airports in respect

of cases falling within the competence of acceptance of tender.
7.4 Tenderer must confirm in writing the acceptance of negotiated terms and
conditions.
7.5 The letter from the tenderer specifying the revised terms and conditions should
be signed stamped and dated by the licensee or his authorize representative on
Printed Letter Head of the Firm. This letter should also be signed and dated by the
members of the Negotiating Committee which shall form part of the Tender
Documents.
7.6 Negotiation proceedings are to be recorded and signed by all the Members of
the Negotiation Committee.

8) HANDING OVER OF SITE/FACILITY

8.1 Site/facility is to be clearly earmarked on a drawing and physically measured
on site.
8.2 Handing over/taking over report to be duly prepared and are to

be signed by senior most officer of the Commercial Department/ In-charge of

Station and the licensee.

31
8.3 Standard pictograph and proper signage indicating the location/ facility/service
is to be provided by AAI. However, the shops signage as per
specifications/dimensions approved by AAI is to be provided by tenderer.
8.4 Arrangement of internal telephone/electricity/ water connections etc. to be
ensured by AAI as per terms and conditions of tender documents.

9) INTIMATION BY DEPARTMENT OF COMMERCIAL TO

DEPARTMENT OF FINANCE & ACCOUNTS FOR

BILLING/PAYMENT
9.1 Copy of award letter and agreement is to be sent to local Accounts
Department and proper acknowledgement kept in the relevant file of the
Commercial Department.
9.2 Date of handing-over is to be intimated alongwith copy of handingover/ taking-

over report of the contract under acknowledgement thereof.

9.3 Date of commencement of licence is to be indicated.
9.4 Brief note is to be sent by Deptt. of Commercial to the Deptt. of Finance
indicating the date of award, date of possession, date of completion of formalities,
date of raising the bills, details of security deposits etc.
9.5 Dep’t of Finance is to open separate file of each case/contract.
9.6 All fixed deposits/bank guarantees towards security deposits are to be kept
under the safe custody by Dep't of Finance. The Bank Guarantee is to remain valid
beyond a period of 6 months after completion of contract.
However, a copy of details of FDRs/Bank Guarantees along with photocopies
thereof is to be retained by Commercial Dep't for timely monitoring.

32
9.7 Any other specific instructions.

10) MONITORING OF QUALITY OF

SERVICE/PAYMENT
PERFORMANCE
Monitoring of Performance
10.1 Dept of Commercial is to ensure:
(a) In case of branded items a board indicating `We Honour Maximum
Retail Price' to be displayed at prominent place in the premises;
(b) In case where the rate of items/services/facility has been approved by
AAI, a list of approved rates to be displayed at prominent locations in the
premises.
(c) Hygienic conditions and quality of services.
10.2 Periodical checks are to be carried out to ensure that the rates being charged
and the service being provided through such facilities as well as the items
authorised, maintenance of proper quality of service, proper display of items,
hygienic conditions of eatable items and timings for the operation of facility are as
per terms and conditions of the Licence Agreement.
10.3 A separate dossier is to be maintained for recording the performance
including quality of services by each licensee in compliance with the terms and
conditions indicated in the Licence Agreement.
10.4 Proper notices are to be issued by Commercial Deptt. to concerned licensee
indicating the areas of unsatisfactory performance, breach/violation in the contract
terms and penal action as per terms and conditions of the Licence
Agreement taken after 3 notices in case no improvement is shown.
Monitoring of Payment performance

33
10.5 The Finance Department/Dep’t assigned the duties for billing at Airport is to
ensure billing and realization of licence fee and other dues within the time frame
indicated in licence agreement.
10.6 A separate dossier is to be maintained for recording the payment performance
of each licensee in compliance with the terms and conditions indicated in the
Licence Agreement.
10.7 Every alternate month Finance Deptt. is to intimate the details about the
payment performance including confirmation about the timely payment and
position of outstanding dues, if any of each licensee to Commercial Department.
Action by RED/APD/Station In charge
10.8 Ensure that the Fire Extinguishers in the licensed premises are provided in
proper order.
10.9 Fire alarm/sprinkler system provided in the licensed premises is in order and
the licensee has no dealing with such system.
10.10 All the fire related installations in the licensed premises including restaurants
and other fire relevant materials, non-inflammable materials, exhausts, utilization
etc. are to be inspected prior to the commencement of the business in the licensed
premises and periodic checks followed.
10.11 The dossier maintained by Deptt. of Commercial/Finance regarding the
performance/payment performance of each licensee is to be reviewed every month
and Action Taken Report is to be submitted once in 3 months.
10.12 Quarterly performance report to be sent to Hqrs. including action taken
against the concerned licensee for unsatisfactory performance.
Constitution and Inspections by Quality Control Committee
10.13 A Quality Control Committee (QCC) may be constituted at each airport
comprising the officers from Dep’t of Operations, Finance, Commercial and

34
Engineering for the purpose of carrying out periodic surprise checks so as to
monitor the quality of services/performances in all the areas.

11) PROCEDURE FOR TAKING ACTION AGAINST

DEFAULTING
LICENSEE
11.1 In case of ex-licensee, their security deposits, if any, may be encashed and
adjusted against outstanding dues. Balance amount, if any, may be recovered in
consultation with Law Deptt. The details of outstanding dues against the ex-
licensee may be reported to RHQ/CHQ. This exercise to encash the
deposits/invoking the bank guarantee may be completed and action under PPE Act

for recovery of balance outstanding dues may also be initiated.

11.2 In case of existing licensee having outstanding dues for over a

month from the due date of payment, Commercial Deptt. should serve a notice by
Regd. AD letter, besides intimating by courier or fax, to clear the dues along with
interest on delayed payment within 15 days of the date of such a notice.
11.3 In case the entire outstanding dues are not cleared by such a defaulting
licensee, his security deposits equal to the amount of outstanding dues including

interest should be encashed as per the terms and conditions of the

agreement.
11.4 Simultaneously, the party should be asked by a Regd. AD letter and by
courier/fax to step up his security deposit to the requisite level under the licence
terms within 15 days of receipt of the notice, failing which licence agreement be
terminated by giving appropriate notice. In such a situation, tender documents
should also be kept in readiness for immediate release to

35
Press for an alternate arrangement.
11.5 Billing action and recovery of dues is to be pursued and monitored by Dep’t
of Finance/Dep’t assigned the duties to raise the bills at Airport and details of
defaulters intimated to Dep’t of Commercial for taking appropriate action as per
terms and conditions of the agreement.
11.6 The Commercial Dep’t is to take appropriate action against parties defaulting
in payment. The action should include; notice to the party for encashment of

security deposit, recouping of security deposit and ultimately termination of the

licence. This action is to be initiated/completed in a frame time schedule and in
such a manner that the defaulting licensees are not permitted to operate the contract
beyond the period of their security deposits. Department of Finance is to be kept
informed for all such actions taken by the Department of Commercial from time to
time at each stage.
11.7 Timely action may be taken under PPE Act for recovery of outstanding

dues/eviction of un-authorised occupants.

12) TEMPORARY EXTENSIONS

12.1 Temporary extensions may be granted with the prior approval of the
Competent Authority as defined under Delegation of Powers.
12.2 Temporary extensions may be permitted under the following circumstances
on the terms and conditions including financial terms to be decided in advance by
the Competent Authority authorized to award the contract as per
DOP and supplementary agreement executed for the extended period:
- Where a clause in the licence agreement exists for extension (e.g.
Tenders invited for 5/3 years but contract awarded for lesser period subject to
extension clause.

36
- In the absence of decision on tenders, temporary extensions may be permitted
upto 90 days on last paid licence fee irrespective of the position of the existing
licensee in tenders whether H1 or otherwise so as to avoid legal complications.
- Where the location of a licence is required by AAI for modification of
building/area etc.
- Where the licence has been granted to a Central/State Govt. Deptt. On negotiated
terms.
12.3 The temporary extensions as above may be approved by the Authority
competent to approve the original tender as per DOP.
12.4 In case of contingency services like restaurant inside the terminal buildings,
RCAC is to approve stop gap arrangements for a period upto 6 months on limited
tender basis / negotiated terms and keep Hqrs. informed.

13) RENEWAL/TERMINATION NOTICE

13.1 Agencies covered under the head of Mandatory (Agencies without tender)
may be informed 4 months in advance for the renewal of their licence agreement
for the space allotted to them including payment of outstanding dues, if any.
13.2 Wherever there is a provision of the renewal in the contract, parties to be
informed 4 months in advance about the date of expiry of the licence asking reply
within one month, in case if they wish to seek extension.
13.3 Where there is no provision in the agreement for extension, tender action is to
be initiated well in advance i.e. 180 days before the expiry of the existing licence
and fresh contract made operative from the next day of the expiry of the existing
contract.
13.4 The following notice period is to apply for termination of the licence by either
side without assigning any reason.

37
Period of contract Notice Period
Upto 1 year 30 days
Above 1 year but below 5 years 90 days

5 years & above 180 days

38
ANNEXURE

ANNEXURE

39
 DOCUMENT NO________

LICENCE AGREEMENT (For Space)

SUBJECT: __________________

THIS AGREEMENT made this______ day of ______ of Two Thousand

___________between the Airports Authority of India, a body corporate constituted
by the Central Government under the Airports Authority Act (Act ____ of 1994)
and having its corporate office at ____________ and offices at all the Airports in
India represented by ___________ hereinafter called the 'Authority' (which term
shall, unless excluded by or is repugnant to the context, be deemed to include its
Chairman, or Member, Executive Directors, Airport Directors, Officers or any of
them specified by the Chairman in this behalf, and shall also include its successors
and assigns) of the one part, and ________ represented by _______ of the other
part, hereinafter called the 'Licensee' (which term shall unless excluded by or is
repugnant to the context, be deemed to include its heirs, representative, successors
and assigns of the Licensee).

WHEREAS the Authority is the owner of the building more fully described in the
schedule hereunder and hereinafter referred to as the premises and whereas the
Licensee is desirous of using the same for the purposes ___________________
_____________________________.

WHEREAS the Authority has agreed to grant licence to the Licensee for the said
purpose on terms and conditions mutually agreed upon as here under :
NOW, THEREFORE, this indenture witnesseth:
40
1. That this licence shall commence from _________ and shall be valid upto
________ i.e. for the period of ________. The Licence period may be further
extended as mutually agreed between the parties.
2. The Licence can be terminated by either side by giving 90/30 days notice in
writing.
3. The Authority can also terminate the Licence on a short notice on account of
unsatisfactory performance.
4. That the licence fee of Rs.___________ per Sqm. per month for the allotted area
of _______ sqm. shall be payable in advance on or before 10th day of each month.
The Licence fee is subject to revision at the discretion of the
Authority from time to time and such increase of licence fee shall be payable by
the licensee without any protest or dispute.
5. That the Licensee shall pay all rates, assessment, outgoing and other taxes
whatsoever in respect of the said premises.
6. That in the event of failure to pay the licence fee and other charges by due dates,
simple interest @ 18% per annum be payable on all delayed payments without
prejudice to the Authority's other rights and remedies.
7. That the Licensee shall pay the charges for the consumption of the electricity
and water consumed in the premises and/or for the purpose of use of the said
premises as become due and payable and in accordance with the directions of the
Authority and at the rates fixed by it from time to time.
8. The Licensee shall maintain at his own cost all the electric and water fittings and
installations and such other electric and other equipments including Fire
Alarm System as may be provided by the Authority in the said premises or as may
hereafter be provided by the said Authority in the said premises.
9. The licensee shall not use the premises for any purpose other than that for which
the licence has been granted.
41
10. The Licensee shall not erect, display or use any high powered electric light or
any electric sky signs or other electric lights or installations for purposes of
advertisement or any other type of advertisement or signboards upon the said
premises without the previous permission in writing from the Authority.
11. The Licensee shall provide such person or persons for watch and ward duty in
the premises as he may be directed by the authority for the security and safety of
the premises.
12. The Licensee shall also provide fire fighting equipment and appliances and
maintain the same continuously in a fit and proper condition. The authority is
entitled to direct and specify the number, quality and specifications of the said
firefighting equipment and appliances.
13. The premises are and shall be deemed to be public premises as defined in the
Public Premises (Eviction of Unauthorised occupants) Act, now in force and the
said Act or any other Act touching the subject that may hereafter come into force
and the rules framed thereunder.
14. All the times during the currency of the licence agreement, it shall be the
responsibility of the licensee to obtain proper fire insurance coverage including
theft and burglary in respect of all the movable and immovable assets stored or
used in the licensed premises and authority shall not be responsible for any loss or
damage caused to the licensee on any accounts whatsoever.
15. The terms and conditions mentioned in Annexure-I to this licence shall be
deemed to be part and parcel of this agreement and the licensee and the authority
shall be bound by the same.
16. Any modification/construction plans, at the allotted space, shall be taken up,
only after the approval of Airport Director.

SIGNED BY ___________________________ AIRPORT DIRECTOR, AAI,

42
_________________________________AIRPORT FOR AND ON BEHALF OF
THE AAI IN THE PRESENCE OF:
WITNESS:
1.
2.
SIGNED BY ________________________ FOR AND ON BEHALF OF
_________________________________________ IN THE PRESENCE OF:
WITNESS:
1.
2.

SCHEDULE OF PREMISES
1. Space measuring _______________Sqm.

2. Location at ___________________

3. Purpose ___________________

GENERAL TERMS & CONDITIONS

43
The Authority hereby covenants with the Licensee as follows:

1. The Licensee, his servants and agents shall be entitled to use all ways, paths and
passages as may from time to time be maintained on the said airport ground subject
to such rules and regulations as may be imposed by the lawful authorities of the
airport ground.
2. The Licensee paying the licence fee and performing the covenants herein
contained and on his part to be performed shall and may peacefully possess and
enjoy the premises with use of the ways, paths and passages as aforesaid during the
said term without any lawful interruption from or by the Authority or any person
claiming under the Authority.
3. Any notice required to be served on the Licensee under this Agreement shall be
deemed to have been served if delivered at or sent by registered post to his last
known address or to his authorised representative or agent.
Similarly, any notice to be given to the Authority under this agreement shall be
deemed to have been served if delivered at or sent by Registered post to the
Authority.
i. The period of notice given under this Agreement will count from the date of
delivery (receipt of notice by either side.
4. Subject as herein before otherwise provided, all notices to be given on behalf of
the Authority and all other actions to be taken on behalf of the Authority, may be
given or taken on behalf of the Authority by the Airport Director of the Airport or
by any other officer for the time being authorised by or entrusted with the
functions, duties and powers of the said Airport Director, in respect of the airport
under his charge.
5. (a) The Licensee shall not, unless with the written consent of the Authority,
create a sub-contract of any description with regard to this licence or any part
44
thereof, nor shall be without such written consent as aforesaid, assign or transfer
his licence or any part thereof.
(b) The Licensee shall use the premises only for the purpose indicated in this
Agreement and for no other purpose whatsoever.
6. The Licensee his agents and servants shall observe, perform and comply with all
rules and regulations of the Shop and Establishment Act, Factories Act,
Industrial Disputes Act, Minimum Wages Act and the provisions of any statutory
law applicable to the Licensee including any rules and regulations made by the
Authority, Civil Aviation Department or any other Department of Government and
or local body or administration in force from time to time and to the business
which the Licensee is allowed to carry on under this Agreement and to the area in
which the said premises are located.
7. (a) The Licensee shall Indemnify the Authority from/against any claims made or
damages suffered by the Authority by reason of any default on the part of the
Licensee in the due observance and performance of the provisions of any law
which may be related to the purpose of this Agreement and to the area in which
premises are located.
(b) The Authority shall not be responsible in any way for loss or damage by any
means causes to the Licensee's stock or property.
8. The Licensee shall at his own cost maintain the premises in a proper state of
cleanliness and abide by such directions as may be given by the Authority and such
other departments as may be entrusted by the rules and regulations with the works
of inspection and enforcement about the conditions of sanitation, cleanliness and
hygiene. If the premises is not maintained in reasonably clean condition by the
Licensee, Airport Director shall have powers to get the premises cleaned at the risk
& cost of the Licensee and recover liquidated damages at the rate of Rs.100/- per

45
day for each default upto 7 days and thereafter Rs.200/- per day and can take other
actions including termination of the licence.
9. The Licensee shall comply with the requirements of all standard health clauses
including those given below:
i. The Airport Health Officer/Medical Officer of AAI or persons authorised by
them may without notice, enter the premises any time and inspect the premises,
materials, instruments and implements etc. used by the Licensee.
ii. All the instructions given by the Airport Health Officer/Medical
Officer of AAI or any persons authorised by them in the maintenance of public
health of the Airport including sanitation control prevention of infectious diseases,
control and prevention of nuisance from insects, rodents, or any other source, shall
be carried out by them and his agent and servants.
iii. The Licensee shall notify to the Airport Health Officer whenever any person
working under him is suffering or suspected to be suffering or convalescing from
any infectious disease. The Airport Health Officer may medically inspect the said
person or any person who is suspected to have been in contact with the person and
take any precautionary and preventive measures considered necessary.
iv. The Licensee his agents and servants shall not without consent of the
Airport Health Officer, interfere with injure, destroy or render useless any work
executed or any materials or things placed in, under or upon any land or building
by or under the orders of the Airport Health Officer with the object of preventing
the breeding or entry of mosquitoes or maintenance of sanitation.
v. The Licensee, his agents and servants shall not abuse the water sources, and
drainage facilities in the airport area so as to create a nuisance or insanitary
situation prejudicial to public health.

46
vi. In the event of any default, failure, negligence or breach in the opinion of the
Authority, on the part of the licensee in complying with either of these conditions
specified in the foregoing sub-clause (i) to (v), the
Authority will be entitled and be at liberty to determine the Licensee forthwith and
resume a possession of the premises without payment of any compensation or
damages and forfeit in full or in part the amount deposited by the Licensee for due
performance of the Agreement.
10. The Licensee shall employ only such servants as shall have good character and
as well behaved and skillful in their business. He shall furnish the
Authority in writing with the names, parentage, age, residence and specimen
signature or thumb impression of all servants whom he proposes to employ for the
purpose of this Agreement before they are so employed and the
Authority shall be at liberty to forbid the employment of any person whom it may
consider undesirable. The servants employed by him shall be under the general
discipline of the Authority and shall confirm to such directions as may be issued by
the Authority in respect of points or routes of entry to and exit from the premises
and in respect of the use of toilet and wash rooms.
11. (a) The Licensee would be required to install adequate number (as may be
determined by Fire Officer/any authorised officer of AAI depending upon the area
of the premises) of 2.5 Kg. CO2 fire extinguisher/any other fire fighting device in
the licensed premises at his cost before commencement of business.
(b) No wooden partition/inflammable materials shall be permitted in the licensed
premises. The material to be used for partition/fabrication of the shop/office
premises shall be as per the specification given by
AAI and to be got approved by AAI in advance.
(c) Licence shall not use a naked light or cause or permit any such light to be used
in the licensed premises.
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12. The Licensee shall not damage the premises for any part of the Airport
premises and in the event of any damage being caused to the same intentionally or
otherwise, by the Licensee, or his employees or invitees or customers, the
Authority shall be entitled to repair the damage or make the requisite replacement
and call upon the Licensee to replacement and call upon the Licensee to reimburse
cost thereof which the Licensee undertakesto pay forthwith on demand.
13. The Licensee shall not store or bring or keep in the premises heavy articles so
as to injure or damage the premises or keep goods of combustible or inflammable
nature.
14. (a) The Licensee shall not use electrical heater, toaster and other allied
appliances in the premises for preparation of tea, coffee and for heating of food etc.
unless specifically provided under the Agreement to perform contractual
obligations.
(b) The Licensee hereby agrees to provide necessary training to the employees
posted in the licensed premises for handling fire extinguisher as provided in the
terminal/licensed premises.
15. The Licensee will, during the continuance of this licence insure against any
claim for workmen's compensation or otherwise of all persons employed by him in
connection with his business to be carried on as aforesaid with such insurance
company as the Authority shall approve of and shall produce for inspection on
demand by the Authority all policies in respect thereof and the receipts from time
to time for current premium.
16. In the case of such breach of the terms of this licence as minor offenses and
complaints coming to its notice for which in the opinion of the Authority this
Agreement need not be terminated; the Authority may at its discretion recover
compensation from the Licensee upto the limit of the security deposit of the

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Licensee. The decision of the Authority in this respect will be final and binding on
the Licensee.
17. The Licensee shall not hold or permit to be held any public or private auction
in the licensed premises.
18. The Licensee shall sell articles in the premises at prices which shall be marked
on the articles or on tags attached thereto and it shall not be in excess of the retail
prices/fair prices fixed by the manufacturers or
Government or any other local authority whichever is lower or controlled price in
case such controlled price has been fixed by any authority and in all other cases,
not exceeding the reasonable market rates for similar goods.
19. It shall be obligatory for the Licensee to keep in stock and in case they are
intended for distribution, distribute the same and display, literature, produced and
released by the Publication Division of Government of India and/or Tourism
Department of the Central Government or of the State
Government within whose jurisdiction the Airport is situated on such terms
& conditions as may be fixed by the said Publications Division or said Tourist
Department.
20. The Licensee shall not stock, sell, display, exhibit for sale any books,
magazines, newspapers or periodicals, statues, idols or other articles which are
repugnant to morals or indecent and immoral, improper or otherwise objectionable
in character, it being expressly agreed that the decision of the
Authority shall be conclusive in this behalf and absolutely binding on the
Licensee and shall not be subject to any dispute or review. Apart from any other
legal/disciplinary action, the Licensee shall immediately remove such book,
journal or articles from premises, if, as decided by the Authority it is objectionable
in any manner to keep, exhibit or sell the same.

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21. The Licensee shall maintain a complaint book in a prominent place in the
premises and in such a way that it is easily accessible to any person who wishes to
record any complaint and the said book shall be open for inspection by the Airport
Director of the Authority or his authorized representative.
22. If because of any strike or lock-out either in the Airport or in any airline, the
Licensee is unable to function or his business is affected, the Authority shall not be
liable for any loss which the Licensee may suffer in such an event the
Licensee shall not be entitled to any reduction in the fees payable to the Authority .
23. In the event of the Licensee being prohibited from selling one or more articles
in the premises because of Government Laws/Rules/Regulations/
Orders, the Authority shall not be liable for any loss suffered by the
Licensee in such an event the Licensee shall not be entitled to any reduction in the
fees payable to the Authority or permission for sale of additional items.
24. The Licensee shall deposit duplicate keys of the premises with the Authority
whenever the Airport Director demands and permit the Authority to make use of
the keys during the emergency. The Licensee shall not remove or replace the lock
on the outer door or change the locking device on the said outer door of the shop
(without written approval of Airport Director/Station Incharge).
25. The Authority do not recognise any Association of the Traders and in case any
negotiation/bargain necessary with regard to the clarification of the
Terms & Conditions of the Licence or modification thereof such negotiations
should be sought by the Licensee alone and no collective representation/bargaining
will be entertained.
26. On expiry of the licence period or on termination of the licence by the
Authority on account of any breach on the part of the Licensee, the Licensee shall
deliver the possession of the premises in good condition and in peaceful manner
alongwith furniture, fittings, equipments and installations, if any, provided by the
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27. The licence herewith granted shall not be construed in any way as giving or
creating any other right or interest in the said space/building(s)/land/
garden/tank/premises to or in favour of the licensee but shall be construed to be
only as a licence in terms & conditions herein contained.
28. The Authority, its servants and agents shall at all times have the absolute right
of entry into the said premises.
29. The provision of the Public Premises (Eviction of Unauthorised Occupants)
Act, 1971 and the rules framed thereunder which are now in force or which may
hereafter come into force shall be applicable for all matters provided in the said
Act.
30. All disputes and differences arising out of or in any way touching or
concerning this Agreement (except those the decision whereof is otherwise herein
before expressly provided for or to which the Public Premises
[Eviction of Unauthorised Occupants] Act and the rules framed thereunder which
are now enforce or which may hereafter come into force are applicable), shall be
referred to the sole arbitration of a person to be appointed by the
Chairman/Member of the Authority. The award of the arbitrator so appointed shall
be final and binding on the parties. The Arbitration & Conciliation Act 1996 shall
be applicable.
31. In case of any dispute where legal action is compelled to be initiated by any of
the party, jurisdiction of the court shall be the city/town/district where the airport is
located

(SIGNATURE OF LICENSEE)

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