Why should you push your landlord to take care of arranging for Power Back-up for your Restaurant?

Posted by fshsfhsfh on Monday, May 21, 2012

Given the number of power cuts in most parts of India, it has become mandatory for a restaurant to invest in a generator and/or a UPS. Do you need a generator or a UPS? What logistical issues will you face with each one of them? What are the options available in the market?

You will pretty much need full power back-up for a restaurant. i.e. If the total power available and needed for your restaurant is 20 KVA, you will need to plan for a power back-up of 20 KVA. My strong recommendation would be to negotiate with the landlord at the time of signing the lease and have him/her install a generator for you or for the entire building. Installing a generator is not as simple as buying a generator and placing it. It involves the following:

1) Investment to buy the generator: You are looking at 2-4 lakhs depending on the capacity (KVA) - most standalone restaurants will require between 10 and 30 KVA of power) and the brand of generator you are buying. This investment is just the tip of the ice-berg. 
2) You need to find a suitable space in the premises to install the generator. You will require a clear flat surface (where concrete can be laid - so storm water drain areas won't work) within the site/land, where the building is located. Generators in the 10-30 KVA capacity range need a minimum clear area of 3m width x 6m length and 6 m height. You will notice a lot of generators are installed in the terrace area of the buildings currently - electricity departments in most states no longer give approvals for installing generators in terraces (due to safety reasons). The vendor will tell you that they will take care of this by installing the generator in a not so visible space and do the installation in the early morning hours - but you need to be prepared to deal with any issues that may come up because of this. Also, if you are installing the generator in the terrace, you will need to hire a crane and this alone will cost you about 10-15K. 
3) You will need to get approvals from the electricity department and pollution control department. Thankfully most generator suppliers/installers will get these for you for about 10-20K. Any generator above a certain capacity (varies by location) will need this approval. You can pretty much assume that you will need this approval for generators 10 KVA and above. 
4) You will need to take care of some civil work - laying a concrete base where the generator can be installed. You are looking at a spend of 5-10K for this. Also remember that you cannot build this concrete base on the area meant for storm water drains. You will need a clear space within the site where the premises is located. 
5) You will need to get electrical earthing work done at the place where the generator will be installed, as per the specifications of the generator manufacturer. You will also need to get the wiring done from the generator to your distribution box (electrical panel box) and install a change-over switch. All this will probably cost you about 20K. 
6) You will need to create exhaust piping (outlet for fumes generated). Depending on where you are installing the generator and what is in the surroundings, you may need to do the piping all the way upto the terrace (similar to what you would do for your kitchen exhaust piping). If additional piping needs to be done, this can get quite expensive - about 800-1000 bucks per metre. You may also need to install a scaffolding to enable to guy to do the piping work. Renting a scaffolding will cost you about 6-10K (rental is typically for a week). If you are doing this, you may want to consider doing this alongwith the kitchen exhaust piping work. 
7) Once the generator is installed, you need to figure out a way to switch it on when the power goes. An Automatic switch-over system will cost you about 40-50K extra. The Auto-Switchover is also known to be prone to problems. Even if you have the auto-switch-over, there is a 5-10 second gap between the time the power goes and when the generator takes over.  
8) You also have the hassles of filling fuel in the generator, maintaining the generator (Annual Maintenance Contracts or AMCs will cost you about 10-20K per year), taking care of repairs etc. You will also realize that the AMC covers only standard service and labour for repairs - all parts that needs to be replaced need to be paid for.  

Given all of this, I assume you are more than convinced on why I would strongly advocate paying a higher rent and the associated higher deposit, but getting your landlord/building owner to take responsibility for the generator. 

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