Deloitte submits Gurgaon CGD valuation report

Vol 22, PW 15 (16 May 19) People & Policy

After finally receiving Deloitte's report, the Supreme Court will have a hard time deciding which figure to accept for the valuation of the Haryana City Gas (HCG) retail network in Gurgaon outside Delhi.

Expect the court to resume work in July when judges evaluate the final report submitted by Deloitte India on May 9 to HCG and Indraprastha Gas (IGL) which wants to extend its reach beyond Delhi to Gurgaon. As an "ongoing concern" Deloitte estimates the HCG business is worth Rs1527cr ($218m) taking into account future projected turnover.

This is the number HCG will undoubtedly be hoping the court chooses when it re-convenes. But Deloitte has also given a second much lower figure of Rs200cr ($28m) for the (mainly) CNG station and pipeline infrastructure.

This is the number IGL will undoubtedly be hoping for. "The Supreme Court will have a difficult time deciding," admits an IGL source.

He adds the company was unhappy with a draft report shared by Deloitte on May 5, with a deadline to comment by May 7. "Many discrepancies were identified.

The main one was Deloitte's assumption of a (government-subsidised) APM gas allocation for 25 years. Nor do we agree with the asset valuation.

HCG has built only 'daughter' (booster CNG) stations not online 'mother' stations which cost more. HCG also found fault with Deloitte's draft report.

"We made a lot of comments," adds a source.