Last Minute convenience stores back off on 18 retail outlets after claiming transport authority will not give firm dates on Red Line.
Chain pulls plug on Dubai Metro stores
A chain of convenience stores has pulled back from putting retail outlets on the Dubai Metro train line after the Roads and Transport Authority (RTA) could not guarantee opening dates for all its stations. Last Minute convenience stores won the bid for 28 locations on the Dubai Metro, but withdrew from 18 spots on the Red Line when it could get no written assurances as to when the stations would be opened, said a company official who did not want to be named.
He claimed the RTA said just eight out of the 27 stations on the Red Line would open by the scheduled date of September 9. A senior RTA official, who spoke on condition of anonymity, told The National earlier this week that 10 stations would open on time. "They don't know exact dates when the stations will open, or when all the stations are going to be active," the Last Minute official said. "So in this condition, we cannot work."
The retailer's move comes less than three weeks before the scheduled opening of the Dubai Metro. RTA officials could not be reached for comment. The Red Line will have a capacity of 23,000 people per hour in each direction, and the Green Line, expected to open in 2010, will be able shuttle 19,000 people per hour, according to the RTA. Fares from one end of the city to the other will cost as little as Dh5.80 (US$1.58).
Businesses that were awarded the 235 retail outlets on the system, totalling approximately 11,000 square metres, were expected to benefit from a million consumers a day passing through the stations. About 500 retailers submitted bids at the beginning of this year. Last Minute, a Dubai-based company with three stores in the emirate, all in Dubai Media City, was eager to sign on with Dubai Metro, the management official said, but did not want not risk losing its hefty investment.
Retail rent over the two years would cost the company upwards of Dh19 million, and Dh45m after fitting out the units and all other overhead costs, he said. "RTA has to co-operate," he said. "We don't mind spending the money, but at least we need assurance." Last Minute was offered three months' free rent starting from the opening day, but was required to hand over a complete set of checks for all 28 units for two years up front, the management official said.
"From September 9, all eight stations are going to be active and my rent is going to be active, whether my store is open or not." The RTA would not guarantee the retailer an ample amount of time to build and staff the store, he added. "For the fit-out, and all this work, they are only going to give me four weeks' time. I said, 'Nobody can do four weeks. That's impossible. Minimum, we require 12 to 13 weeks for the fit-out work'."
Last Minute has not pulled out from its 10 outlets on the Green Line, he said. Yesterday, Last Minute's operations manager Bhagwan Bas was quoted by Arabian Business as confirming that the retailer had pulled out of its units. Boy Ramesh, a director with Last Minute, declined to comment. email@example.com