Anand Doraiswamy spends most weekend afternoons at R Mall, his neighbourhood mall in this city’s central suburb of Mulund, watching movies and basking in the mall’s air conditioner.
Last weekend, he encountered cancelled movie shows, shuttered ticket-windows and no air conditioning in the corridors. Doraiswamy, a 28-year-old who works at a personal-care products company, had walked into one of Mumbai’s first power outages of the year, caused by the state’s acute power shortage.
Faced with an acute 6,700MW power shortage in Maharashtra and around 500MW power shortage in Mumbai, the state’s electricity regulatory commission has zeroed in on malls and multiplexes. As a result, power charges could more than double for most Mumbai malls and multiplexes, effective 1 May. Mumbai currently has 15 malls, while 51 are proposed.
“The malls are power guzzlers. For the first time, we are giving a clear signal to reduce their consumption,” says Pramod Deo, chairman Maharashtra Electricity Regulatory Commission.
Maharashtra was one of the few power surplus states until 1995. But after the Enron Corp. power plant collapsed under allegations of high power tariffs and untenable counter guarantees given by the state government, no new power plant was added for more than a decade.
Meanwhile, power demand grew at around 6.75% each year. As more homes, farms, factories and the state’s first malls and multiplexes were added to the equation, there was a widening gap between demand and supply. With a 30% shortage in power supply this year, Mumbai faces prospects of its first load-shedding.
At R Mall, which was one of the worst affected by the power crisis, 16 movie shows at its multiplex, were cancelled last week. “Our revenues are affected due to non-operations,” said Tushar Dhingra, chief operating officer at Adlabs Cinemas, the movie-theatre chain which runs a multiplex at the mall. While residential users may end up facing power cuts, malls and multiplexes could pay Rs8.50 per unit, an increase of 146%, according to estimates by retail industry lobby, the Retailers Association of India.
“I used to spend more time in R Mall over the weekends because I enjoyed strolling around in the air conditioning,” says Doraiswamy. “But now it is hot inside as well. It is as good as being at home.”
Faced with mounting power costs, Mumbai retailers, who have never faced power cuts before, are now redesigning interiors, lighting systems and reducing air conditioning.
At Vijay Sales, a Mumbai consumer-durables chain, just 10 of the 150 television sets are kept on between 11am and 5pm. Ceiling lights, display lights, and music systems are also kept off during the day. “If a customer wants to see a switched-on television set, we make sure to switch it off immediately after the customer is done seeing it,” says Janjani Shyam, branch manager of their Dadar store.
At Orchid City Centre, a mall in central Mumbai, lights are switched off during the day, ventilators only come on during peak hours, escalators only start when users come close to it. At Croma, a consumer-durables chain, there are fixed timings for air conditioning, lights in the back office are kept at a bare minimum and energy-efficient bulbs are used. “We keep power usage as low as possible without compromising safety for our staff or customers,” says Ajit Joshi, Croma’s chief executive.
It is a difficult toss-up for retailers to keep rising power costs in check, while ensuring store traffic and sales. For instance, out of the 10-12 watts per sq. ft power typically used at a mall, eight-nine watts per sq. ft go in to air conditioning.
Now, Inox Leisure Ltd, a national multiplex chain with one location in Nariman Point, and Adlabs Cinemas have turned up the temperature in their air-conditioned premises to around 24° Celsius.
“Sometimes customers do ask us and our staff explains that this has been done to conserve power,” says Alok Tandon, chief operating officer at Inox. Lighting for display boards at stores has also gone up by around 60-70%. While sensors can dim lighting when there are no customers in an area, “this is not easy to do because merchandise will not sell in areas which is not well lit,” says Ravi Sarangan, director at Edifice Architects, an architectural firm that works with several mall developers and retailers.
While developers are considering adding such features to the malls that are under construction, it could add around Rs200 per sq. ft to the around Rs2,000 per sq. ft cost of developing a mall.
Retailers plan to approach the commission and the state government to ask for a reduction in power tariffs.
“Two-thirds of products at supermarkets sell at maximum retail price, retailers pay increasing service costs and now higher power charges too. Retailers margins will be affected,” says Gibson Vedmani, chief executive of the Retailers Association.