Indias infrastructure growth continued to be sluggish on account of stalledprojects weak investments and lower financial support from bankers and capital markets.But our optimism is derived from the fact that once we have a healthy balance sheet andregular positive cash flows we will be able to capitalise on the Governmentsinitiatives to revitalise the infrastructure sector.
Going ahead I expect Gammon Infrastructures performance to re-bound withmomentum. This is because our proactive divestment of assets; clear focus on projectexecution; and the judicious business selection that is matched to our core domainexpertise.
I am pleased to report that your Company has concluded a deal worth Rs. 436 crore forthe sale of certain assets to Canada-based Brookfield Asset Management a marqueeglobal investor with presence across economies and geographies. This unique deal allowedus to monetise a basket of projects in multiple sectors and at different stages ofdevelopment. This path-breaking transaction has rekindled active interest from variousglobal players. Whats more it has validated our strategic efforts to deleverage andas a consequence our investors have reposed their faith in the Company.
There are a number of reasons why we are optimistic for our prospects.
To begin with we are encountering a resurgent economy. Aided by a decline in oil andcommodity prices and on the back of the reform initiatives taken by government the Indianeconomy is expected to grow at the rate of 7.6% in 2016-17 and an estimated ~7.7% in2017-18. To follow this the advent of GST will positively impact our GDP. India is set toimplement its biggest tax reform since Independence - Goods & Service Tax (GST) from April 2017. This is widely accepted as an important initiative to simplify theindirect tax regime in India and catalyse economic growth with the potential to add toIndias GDP. Furthermore the Government is seriously addressing the countrysInfrastructure gaps. With increasing urbanisation the Indian Government has realised theneed for cities that can cope with the inherent challenges of urban living and also bemagnets for investment to catalyse the local economies. The announcement of 100smart cities falls in line with this vision.
In addition to these positive drivers the Banking sector has been armed by theregulator with mechanisms to address the unique nature of long gestation infrastructureprojects such as 5/25 scheme for debt restructuring and the Scheme for SustainableStructuring of Stressed Assets allowing External Commercial Borrowing for longer duration. These measures allow infrastructure developers such as your Company to address hardproject financing issues and opt for cheaper refinancing.
Additionally a variety of Government reforms on the anvil give us reasons to feelpositive. The Centre now permits developers to divest 100 per cent equity in projects twoyears after completion. This move will help financially-stressed private investors tomonetise assets and thereby unlock capital for future projects or to retire costly debt.The restructuring of balance sheets of power distribution companies under Uday Schemeauctioning of coal mines and Make in India campaign of Government of India augurs well forthe infrastructure sector.
Finally we are also beginning to some sector specific friendly policies. TheGovernment has decided to take up many of its infrastructure projects on thehybrid-annuity mode a new model for implementing contracts under the Public PrivatePartnership (PPP) projects in highways Namami Gange and railway projects. The Governmentis keen to accelerate the pace of projects execution and is keen to experiment with newmodes of financing which help fast track works and reduce the burden on developers andfinancial institutions.
As an infrastructure player your Company is attractively placed to capitalise on thesemany developments that I have delineated above. Steadfast to our fundamental businessprinciples we remain committed to improving the economic value of profitable operationalprojects and executing a healthy project pipeline with minimal cost and time over-runs.We are "Future Ready" to expand our asset base in a more vibrant marketplace.
On behalf of the Board I express my appreciation for your invaluable support and theconfidence reposed in us. Your continued encouragement will help us in elevating theCompany to a new orbit of excellence. We are thankful to Government Departments PublicAuthorities and Banks for their continued support.