King Power defends against accusations
King Power International, the operator of the duty-free concession at Suvarnabhumi Airport, came out yesterday to defend itself from allegations over failure to render a Bt2-billion advance payment to Airports of Thailand (AOT), saying the company had already fulfilled the obligation.
As for overexpansion of its shop area, the company cited a loose agreement the company made with the former Thaksin government that allowed the company to expand its commercial area inside the airport without restrictions. Group chairman and CEO Vichai Raksriaksorn said the company paid the money on the date of contract signing between King Power and AOT: March 25, 2005. "The AOT financial officials have already received the money and issued a receipt," he said. Earlier, a National Legislative Assembly subcommittee accused the company of failing to execute the Bt2-billion payment. Vichai said the payment was confirmation the company was committed to investing in the airport in the long term. "Such an allegation has defamed my reputation, and suppliers are worried about the situation, especially Gucci and Chanel, which are scheduled to open shops in Suvarnabhumi on February 15," said Vichai. Apart from the missing payment, King Power is also alleged to have violated its contract by overexpanding the shop areas in Suvarnabhumi Airport so that they obstructed passenger walkways. Vichai said the contract stipulated that the duty-free area should cover no less than 5,000 square metres. Thus, the company used 9,498 square metres of the airport space to set up duty-free shops. "I can do that, because the paper says so," he said. Vichai said the expansion would allow the company to increase returns to AOT from Bt1.26 billion a year to Bt2.34 billion. In addition, the contract says King Power is authorised to use 20,000 square metres for commercial purposes, but the company has so far used 21,065 square metres. Vichai said although the contract said the company could use 20,000 square metres, it opened an option for the company to expand the commercial area. He said King Power International had suspended all advertising at the moment, pending a clear direction from the government on what it would do with the company. He said his company had so far spent Bt20 billion on its facilities in the new airport. Suchat Sritama The Nation
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