KUALA LUMPUR, May 18 — Tenaga Nasional Bhd (TNB) must stand by its plan not to pay 1Malaysia Development Bhd (1MDB) any premium should it take over the 2000MW coal-fired power plant project or “Project 3B”, DAP’s Tony Pua said.

The Petaling Jaya Utara MP said paying a “premium” for the concession would not only constitute a bailout for 1MDB, but may also result in an increase in power tariffs due to the increased cost to TNB.

“Therefore, in the event that the sale of the 2,000MW power plant concession involves a potential change in tariffs or any ‘premium’ payout, then the EC must reject the transfer, terminate the concession and re-open a new tender exercise for the power plant,” Pua said in a statement here, referring to the Energy Commission by its initials.

“In fact, the EC must also financially penalise 1MDB for failing to fulfil their obligations in the concession contract and jeopardising Malaysia’s energy cost and security,” he added.

Last week, Energy, Green Technology and Water, Datuk Dr Maximus Ongkili confirmed that TNB is in discussion with 1MDB over possibly acquiring the biggest equity in the RM11 billion Project 3B.

Following the announcement, TNB CEO Datuk Azman Mohd said the same day that TNB “will not pay a premium for the project. We will just pay them (1MDB) for costs incurred. If anything, we will ask for a discount. They (1MDB) are not in a position to dictate the terms”.

He told The Edge Financial Daily that although TNB is interested in the deal, it has not received any offers from the EC or the government to take over the project.

Pua lauded the announcement by Azman but noted that the TNB CEO had also reportedly said that the power firm will be seeking a tariff revision should it take on Project 3B or it may not be “commercially viable”.

The DAP lawmaker said the EC must not approve the transfer of any rights in the power plant if it were to involve changes in tariffs as this would be a “complete mockery” of the open tender exercise, which is to seek the bidder that offers the lower possible tariff.

“Hence, to protect the independence, integrity and good governance of the government and the regulating authority, the EC must immediately prepare to call for a new open tender exercise for the Project 3B to ensure that the power producer with the lowest possible tariffs are given the right to carry out the project.

“Otherwise, ordinary Malaysians will be faced with the inevitable burden of having to pay for higher electricity costs,” he said.

Project 3B is a 2,000MW coal-fired power plant adjacent to the Jimah Power Station in Negri Sembilan, another power project that 1MDB currently has a 75 per cent stake in.

1MDB won the RM11 billion Project 3B through competitive tender last year, according to The Edge Financial Daily.