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CAA head faces grilling on airport duty-free bids

The head of the Civil Aeronautics Administration (CAA) faced tough questions yesterday about the bidding process for duty free trade in terminal two of CKS International Airport.

People First Party (PFP) legislator Shen Chih-hwei (沈智慧) yesterday queried the CAA on a number of aspects of the bidding process, including why they were holding the bidding so long before July when the contract with the company currently running the duty free trade in Terminal Two is due to end.

She also questioned why the contract for the project was for 12 years, whereas that for the duty-free store in terminal one was for only six years, and asked why it was that the bidding process was to be completed in just one stage rather than the normal three stages.

"Is it a case of the CAA trying to rush the project through while things are still unstable with the Cabinet undergoing restructuring?" Shen asked.

She also said that she had made appeals to Premier Frank Hsieh (謝長廷) to take action early yesterday morning, but that Hsieh had said he was "powerless" to do anything in his present position. The bidding was slated to be completed by the end of yesterday.

Shen additionally queried why the criteria used to assess bidders was not based on the highest bid but on more ambiguous matters such as company image, customer service strategies, and staff training.

"Without boundaries set for how much of their proceeds the successful bidder needs to give to the government, it could be anywhere from 5 to 55 percent. This amounts to a net difference of NT$120 billion (US$37 billion) over 12 years which would be a great loss for the national coffers," she said.

In response, Chang Kuo-cheng (張國政), head of the CAA, said "It's obviously good to give the business to the highest bidder, but what if somewhere down the line they can't pay up or they don't manage things properly? Then the contract will need to be terminated."

As for using "image" as one of its criteria, Chang said this would ensure the company's reputability and it would help guarantee that the duty-free stores had a good image.

Asked why staff training and customer service strategy were relevant, Chang said, "These all help towards providing better services, which is the key to drawing in customers."

He said they were completing the bidding process early because some firms may not have a duty-free goods license and obtaining one would be time consuming.

"If we don't leave enough time, procedures may not be completed by July and there would be a gap in operations," Chang said.

In explaining why the bidding was taking place in one stage and in such a short amount of time, he said "Why waste time doing things over a longer period when the same thing can be done in a shorter amount of time?"
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