Tata Power Renewable Energy Ltd. Managing Director and CEO Sanjay Banga yesterday underscored how well-designed Public-Private Partnership (PPP) models have transformed India’s power sector and could offer valuable lessons for Sri Lanka as it finalises its own PPP framework.
Delivering the keynote at the ‘PPP: Partnership and Prosperity for People’ forum High Commission of India in collaboration with the Ceylon Chamber of Commerce (CCC) in Colombo, Banga drew on India’s seven decades of experience in power generation, transmission and distribution, stressing that PPPs when built on accountability, clear regulation and stakeholder alignment; can deliver efficiency, financial sustainability and better service to citizens.
Tracing India’s power sector journey from independence to the present day, he noted that India’s initial post-1947 structure placed energy management in the hands of state electricity boards, which controlled generation, transmission, and distribution. However, inefficiencies, mounting losses and governance challenges soon highlighted the limitations of State-run monopolies.
‘To overcome these gaps, the Government introduced the first central generation company, NTPC, to meet the energy deficit and later established the Power Grid Corporation of India to ensure a reliable transmission network,’ Banga explained. ‘These reforms opened the door for private investment and that’s where the PPP model truly started to reshape India’s energy landscape.’
He said that over time, PPPs have allowed India to bring in private sector efficiency and capital, whilst maintaining Government oversight. In most energy partnerships, the Government retains a 51% stake, while 49% is held by private operators, ensuring both accountability and agility. ‘The Chairman is usually a State representative, while the CEO and management team come from the private side. This balance gives the model credibility, efficiency and transparency,’ he said.
According to Banga, India’s power transmission sector provides a striking example of PPP success. ‘Every major transmission project today is bid out and implemented under a PPP structure. The Power Grid Corporation, along with private players, ensures national connectivity, and returns are regulated; currently around 13%. This predictable and transparent framework keeps private investors engaged while protecting public interests,’ he explained.
Reflecting on India’s experience, he highlighted that PPPs are not just about privatisation; but they are about building ‘mutually beneficial models that combine public objectives with private execution strength.’
He cited Odisha’s (formerly Orissa’s) electricity sector as a key case study that illustrates both the pitfalls and potential of PPP reform. The State’s first attempt at privatisation in 1999 failed due to poor contractual design, lack of transitional support and absence of Government backing during the early stages of reform. ‘The model failed because the private player was left alone to absorb losses, whilst banks stopped funding and the Government withdrew support. Eventually, the regulator had to cancel licences,’ Banga said.
However, Odisha’s second attempt in 2013 turned out to be a landmark success story. Learning from its earlier mistakes, the Government redesigned the PPP contracts with built-in safeguards and shared responsibilities.
‘In the restructured model, the Government acknowledged that private utilities would incur losses during the first five years and committed to support them during the transition period. The result was remarkable. Within five years, all five distribution companies turned profitable and three of them rose from the bottom 10 to the top 10 in India’s utility performance rankings,’ he explained.
Banga attributed this turnaround to better contract design, accountability frameworks and long-term alignment between public and private objectives.
‘The lesson from Odisha is clear. A PPP is only as strong as its structure. The success depends on whether all stakeholders, including employees, customers and regulators, are considered in the design,’ he said.
He also cited Delhi’s electricity reform as another exemplary PPP model. When Delhi’s power utilities were restructured in 2002, the city faced high losses and unreliable service. ‘The new PPP arrangement fixed clear performance targets and allowed private operators to manage operations, with Government oversight and employee protection. Over the years, technical and commercial losses dropped dramatically from 53% to under 10% and the city now enjoys reliable power supply,’ Banga pointed out.
Beyond the power sector, Banga argued that PPPs can also be effective in other public utilities and service delivery.
He pointed to India’s passport issuance model, where the State retains control over security and policy functions, but outsources operational management and customer-facing services to IT firms. ‘This hybrid approach has improved service delivery, reduced processing times and maintained State oversight; a model worth replicating in other public services,’ he suggested.
Banga also cautioned that PPPs must ‘not be viewed’ solely as vehicles for privatisation. ‘Divestment is not the only path. Operation and maintenance contracts, time-bound performance-based management agreements and build-operate-transfer (BOT) models can all serve public needs if designed with care,’ he added.
He asserted that one of the greatest strengths of India’s PPP journey lies in its adaptive learning or the ability to reform frameworks based on experience and evidence. ‘India’s PPP story was not built overnight. It evolved through trial, error and continuous learning. The Government has now made it clear that unless State utilities engage with private partners and introduce accountability, central funding support will not be forthcoming,’ he said.
Banga reiterated that Sri Lanka stands at a pivotal juncture in designing its PPP legislation and can draw valuable insights from India’s decades of experimentation and reform. ‘The PPP model is not just an economic tool, it is a governance innovation. When designed right, it ensures transparency, efficiency and reliability in service delivery. The goal is not merely to attract investment, but to build systems that work for people,’ he emphasised.