Paul Bayly was appointed to the hot seat as Chief Executive Officer of PNG Power Ltd (PPL) in March. Ahead of his appearance at the 2025 PNG Investment Conference, the New Zealand national sits down with Business Advantage PNG to share the plans to address the challenges facing the state-owned utility.

PNG Power’s Paul Bayly

BAPNG: How will your previous experience help you in this role?

Paul Bayly (PB): In both my banking and government careers, a lot of it has involved turnarounds and rebuilding businesses. I like fixing things.

I started out as a banker at Citibank dealing with distressed businesses which we either worked with management to fix, or they failed. It was a pretty tough place to start but it was deliberate; there is no better way of seeing how businesses deal with change.

“We are confident that, with continuing support from our government shareholder, the IPPs and creditors and, most importantly, our PPL team, that we can turn PPL around.”

After a 30-year career in investment banking, I went to work for the Fijian Government as the Permanent Secretary to turn around the Ministry of Infrastructure and Transport to make it client-focused. After I finished there, I got picked up to go to the British Virgin Islands to set up a new redevelopment agency for the British Government to rebuild the infrastructure that had been destroyed by tropical hurricanes Irma and Maria.

PPL is probably the most complex of any task I’ve done, because everything needs to be looked at. The last time it made a profit was 12 years ago.

BAPNG: What are your priorities for the first 12 months in the role?

PB: My first priority – as in any business doing a turnaround – is the people. A good business can be ruined by having the wrong people there. Equally, a bad business can be turned around with good people coming in. We have many great people across PPL, particularly our engineers, but the leadership has been missing. It is such a shame PPL has got into this poor state.

Then we’ve got issues around revenue enhancement. We’re a K1 billion-plus business. We could certainly grow that significantly. But, alongside that, there have got to be appropriate controls around cost. For example, we’re spending an inordinate amount of money flying people around PNG because many of the technical people are based in head office. We are starting to move them out to where they are really needed: in the field.

We are re-organising our businesses to be aligned to each of our four grids. We’re devolving authority and resourcing to the regional offices. That’s in play. It will take a while.

Thirdly, we’ve got a very broken-down network with lots of single points of failure. We’re focusing on what we can do in the short term. There is probably a dozen transformational projects that will result in quite a marked increase in generation, transmission, distribution and reliability. That’s quite exciting.

But then we’ve got an issue about collecting the money. We have 25 per cent losses across the system which we are focused on bringing down. Finally, we also have an urgent need to repair the balance sheet of PPL because at the moment we’ve technically insolvent.

BAPNG: PPL’s ongoing issues with under-capitalisation have been well documented. How are you planning to address this?

PB: I’m discussing with our shareholder [state-owned Kumul Consolidated Holdings, PPL’s sole shareholder on behalf of the PNG government] around what we could do to recapitalise the business. That may include immediate cash infusions, but those discussions are still just really commencing, both in scale and timing.

I can see how we can recapitalise the business in the longer term, but we’ve got immediate needs around the independent power producers [IPPs] requiring payments that we need to address today or next month, not next year.

We’re now talking with the IPPs and others about how we can arrest our increasing debts. As we build reliability, and with that comes increased revenues and increased cash flows, we can start to look at how we bring the thing back under control. It will take us at least a couple of years to make meaningful inroads.

This process is also really important because the Government has announced its intention to partially privatise PPL. Having a well-capitalised balance sheet and a performing business will be critical to ensuring the privatisation process is successful.

BAPNG: Could you speak about the National Electrification Rollout Plan and how it compares to other priorities?

PB: It’s important. In May, we presented to our own board a 15-year plan for growing and connecting the transmission network. That’s really a pretty seminal piece of work.

We followed that in June with a meeting of all our international donors. We presented to them our priorities for the next three years. Prior to this happening, PPL has been driven more by the priorities that the donors think we need. Having a 15-year plan, and having worked to bring it back to a three-year outlook, we now want to speak to our donors around ways that they might be able to support us to deliver what we think is critical.

We are confident that with continuing support from our government, shareholder, the IPPs and creditors and most importantly, our PPL team, that we can turn PPL around. It is going to be tough but it is certainly doable.

Paul Bayly will be speaking at the 2025 PNG Investment Conference, held on Monday 11 & Tuesday 12 August at the Brisbane Convention and Exhibition Centre. You can register to attend the event and find out more information about it here.