Aer Rianta has strenuously denied reports in a Lebanese newspaper that a contract it won to manage the duty-free operation in the new Beirut airport terminal has been declared void by the Lebanese government.
The Beirut Daily Star quoted the Lebanese Prime Minister, Mr Salim Hoss, as declaring the 15-year contract null and void on the basis that a public function of this nature can have a maximum contract of four years.
A spokesman for Aer Rianta said: "We tendered openly for this contract, it was awarded to us and as far as we're concerned, that's it."
Aer Rianta has a 22 per cent stake in the Phoenicia Aer Rianta company (PAC) which won the contract, with the Lebanese company Phoenicia holding 32 per cent and other Lebanese investors a combined 46 per cent.
The 15-year contract was signed in 1996 and required PAC to make an initial payment of $39.6 million (€37.92 million) followed by annual payments based on the number of passengers in excess of 1.5 million using the airport each year. More than $20 million of the up-front payment was paid when the contract was signed, with the balance due to be paid when PAC takes control of the 6,000 sq m duty-free operation next year.
Mr Mohammad Zeidan, senior partner with PAC, said the company would pay out $225 million to the government over the life of the contract, based on the 2.1 million people who passed through the airport last year and predicted passenger growth of 10 to 15 per cent a year.
While Aer Rianta insisted that the PAC contract was intact, the Prime Minister was quoted as stating: "According to our laws, a public function can be given for four years only. It was ruled null and void by the judiciary."
Aer Rianta's general manager in the region, Mr John Sutcliffe, was quoted in the Daily Star as stating: "This is the first experience of this kind we've had. This is causing considerable dismay. It seems odd that you would read it in the paper instead of finding out formally from the government. This is a serious issue. Contracts have been signed and money has been handed over. We will seek clarification."
Mr Sutcliffe added that, if the government formally calls off the PAC contract, "we're not just going to sit back and accept what has happened. We will seek legal advice. We're not ruling anything out".
