The escalator dilemma: refurbish or replace?
The escalator dilemma:refurbish or replace?

In modern multistorey shops, escalators are the best way to move high numbers of customers between floors. In most department stores, customers will enter on one level and need to be dispersed and moved to upper floors quickly and efficiently. Escalators, which can handle upwards of 9000 people an hour, are the ideal way of doing this.

The retail market is volatile at the best of times. Business strategy is often driven by changes in customer demographics and buying habits. Change also occurs when retailers enter a market and look to move into properties occupied by other retailers. This is particularly true of city-centre sites, where high-quality space in prime locations is hard to come by.

It is not unusual for one building to be occupied by a number of different retailers over its lifetime. In most cases, the interior of the building will be totally refurbished each time a new occupier takes over, and while there may be some potential for retaining existing plant and equipment, the chances of inheriting serviceable, well-maintained plant is often minimal.

Escalators, however, are different. Good-quality machines can often offer continual and reliable service for more than 25 years, and the ability to refurbish existing machines to a virtually “as new” standard means that the options for replacement and/or refurbishment need to be carefully explored.

In the fifth article in the series, we explore the comparative whole-life costs for three alternative ways of dealing with escalators in a store. The building chosen for the comparison is a five-storey structure in central London, which contains 10 escalators. In the case of the 800 mm wide ones, although they are only 10 years old, wear and tear is starting to take its toll.

Here are the options:

  • Refurbish the existing escalators now, and replace them at year 13

  • Replace the escalators now, and refurbish in year 13

  • Undertake a major overhaul of the escalators now, and a second refurbishment at year 13.

For all options, it is assumed that the overhaul or replacement works at years 1 and 13 would be part of a major refurbishment. If these works were carried out independently of any other building works, then the refurbishment or replacement costs would be significantly higher than those included in this cost model.

Each option can ensure that the escalator installation can be operated and maintained to the same standard for the next 25 years.

The decision on whether to overhaul or replace the machines needs to be considered in the context of cost, aesthetics and traffic throughput. For instance, retaining existing escalators can limit the range of architectural solutions, and this may not be aesthetically suitable for some high-quality refurbishment schemes.

Alternatively, detailed traffic flow calculations may indicate that the escalators need to be bigger and therefore have to be changed (800 mm escalators have a maximum capacity of 6750 people an hour, while 1000 mm escalators can handle 9000 people an hour). However, if there are no apparent restrictions on retaining the current machines, the possibility of reusing the escalators should be considered. As the cost model will show, the double refurbishment option is between 7.5% and 13.5% cheaper than the other two options over the life cycle.

Capital Costs

Capital costs are based on the refurbishment and like-for-like replacement of the existing escalators to the following specification:

  • Refurbishment Complete escalator overhaul, including the replacement of most moving parts (for example, chains, hand rails, and drive chains for hand rails); all control and electronic equipment; the complete rewiring and replacement of hand rail lighting; cleaning of steps, refurbishment of decks; general

    clean-up and repaint as required. Balustrades would not be renewed.

  • Replacement Supply and installation of completely new escalators; 4.5 m long units with 35º pitch; 800 mm wide steps; glass balustrades; under-handrail lighting; cladding to escalator truss; truss-mounted sprinkler.

    Capital costs are shown below and comprise the cost of replacing or refurbishing the escalators, new electrical supplies, all builders work in connection (including truss cladding for refurbishment, and removing and reinstating the facade for replacement), subcontractors’ preliminaries, testing and commissioning, main contractor’s preliminaries, overhead, profit and attendance, and an apportionment of professional fees. The cost of lighting, sprinklers, air conditioning and so on around escalator soffits and openings is excluded.

The cost model also assumes that the works would be eligible for capital allowances relief.

Whole-life costs

The whole-life cost for each option has been calculated over a 25-year period and is expressed in terms of its net present value. The life-cycle calculation for each system consists of four primary elements:

  • Major asset replacement The replacement or refurbishment of the escalator options at a given point in time

  • Maintenance Annual comprehensive maintenance, which covers almost every eventuality including major component replacement, major repairs during store hours, and weekend/bank holiday call-out service. Accidental or other damage is excluded

  • Emergency call-outs Costs for emergency call-outs because of accidental damage or misuse such as coins in comb plates, chipped steps, or stop button activation. Based on historical data, the current rate of occurrence for call-outs is 1.8 times per escalator per year

  • Energy costs The annual cost for electricity consumption is based on one 7 kW motor per escalator operating at 96% efficiency, plus lighting and so on.

The financial risk associated with individual component failure is somewhat limited because of the nature of the annual comprehensive maintenance regime, which covers most forms of breakdown or component failure. The escalators will still need to be refurbished or replaced at a point when many parts are worn and need replacing. In a retail environment, this is between 10 and 15 years. For the purposes of the cost model, we have allowed for refurbishment or replacement at year 13.

For the double refurbishment option, the refurbishment at year 13 is more expensive than the initial overhaul. This is because more equipment is being replaced during the second refurbishment, and as the extent of the on-site refurbishment increases, so does the cost.

It should also be noted that at the end of the 25-year period covered by the cost model, the double refurbishment machines would be 35 years old. At this point, it becomes very costly to continue refurbishing the machines, because the extent of the refurbishment would consist of a total site rebuild by hand, which would be more expensive than buying new escalators

The discount rate used to calculate the net present value for each element of the life cycle is once again assumed to be about 4%.

Cost analysis

Not surprisingly, the double refurbishment (option 3) is the cheapest over the life cycle. Despite the higher cost of the second overhaul, it is still considerably cheaper than the other two options, both of which contain a total escalator replacement at some point in the life cycle.

Perhaps the most interesting element of the whole-life costs is the consistency of results for the annual maintenance costs. Providing machines are refurbished at appropriate intervals there is no difference between the cost of maintaining a brand new escalator, or one that is 10 or 20 years old. Clearly, the absence of any cost penalty for maintaining older machines is the reason that refurbishment is the most economic option over the life cycle.

The whole-life costs for the other two options are very similar. The additional cost associated with providing new escalators at some point in the life cycle (£400 000 at current prices) has a major impact on the performance of both options.

Once again, the parity of performance between new and refurbished machines means there is no difference in costs for call-outs or energy. This would again seem to suggest that, all other things being equal, refurbishment is a viable and preferable alternative to replacement.

At a glance

  • Refurbishment is the cheapest alternative if the escalators’ age and capacity does not preclude it.
  • Escalator replacement may be the only option if architectural layout and capacity are major influences on choice.