22 October 2018

Namibia: Paragon Gets Three-Year Airport Shop Deal

The Namibia Airports Company has given Paragon Investment a three-year contract to operate a duty-free shop at Hosea Kutako International Airport on condition that they relocate the current shop to make room for passenger space upgrades.

Paragon Investments, owned by businessmen Desmond Amunyela and Lazarus Jacobs, has been running a duty-free shop at the airport since 2007. There was, however, rife speculation a few months ago that Paragon could lose the airport shop contract, which has reportedly brought them close to N$200 million over five years.

The Namibian understands that things turned in their favour in recent weeks after the NAC, desperate to upgrade the airport to meet international standards, offered them a lifeline. The upgrades include relocating the duty-free shop to make way for passenger space in the upgraded airport.

NAC acting chief executive Lot Haifidi wrote to Paragon on 10 October 2018, explaining the terms of the new contract, with an option for a two-year extension.

Haifidi said the NAC was in the process of changing its retail facility set-up to ensure compliance with the International Civil Aviation Organisation's safety and security standards.

The facelift means the duty-free shop will be relocated to an area presently occupied by Amushe Lounge operated by Menzies Aviation Namibia (Pty) Ltd, a few metres from its current position. The new contract, however, reduces the size of the shop from 227 square metres to 63 square metres.

Paragon will pay shop relocation costs, and the NAC will reduce the rental fee as well as suspend the entire rent during the relocation.

"We are desirous to simultaneously commence with the process of the said eventual relocation to new premises soonest,'" Haifidi said.

The relocation of duty-free stock commenced on 11 October to enable the NAC to start the arrangement of the security screening the same day, the letter said. Haifidi also asked Paragon to submit a proposed design and concept of a smaller duty shop by the end of the month for the NAC's consideration, and approval from the Namibia Civil Aviation Authority. Paragon director Amunyela said there was an agreement reached on the deal, but he declined to comment further, and referred The Namibian to the NAC.

NAC's Haifidi asked that questions be emailed to him.

Paragon's contract for the shop ended in April this year, but the company received a contract extension on condition that the NAC would give them three months' notice to move out if a new shop operator was found.

Tenders for the duty-free shop closed in June this year, but the emergency upgrades at the airport forced the NAC to abandon that tender and offer Paragon the deal in order to start the airport facelift.

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