The Energy Commission yesterday said that Tenaga Nasional Berhad's (TNB) RM2.45 billion deal with Samsung to develop a power plant in Penang was above board, but did not respond to allegations that the premier's son may have lobbied for the South Korean tech giant.

Last week, Solidariti Anak Muda Malaysia (SAMM) had raised the suspicion that one of Prime Minister Najib Razak's sons had lobbied on behalf of Samsung for the deal with state-owned TNB.

The NGO had made the suggestions based on a dateless photograph allegedly depicting Najib's scion with the company of purported Samsung officials at a dinner event.

NONE SAMM leader Badrul Hisham Shaharin ( left ) did not provide details of the so-called Samsung officials, but claimed that the photograph was taken at a time when various companies were busy lobbying for the project.

Badrul Hisham also claimed that TNB's partnership with Samsung made a mockery of the international tender conducted by the Energy Commission last year for the project, which involved nine bidders.

In a three-paged press statement yesterday, the Energy Commission clarified that there were five consortiums and four individual companies - of which one was TNB - which were pre-qualified for the bid.

TNB eventually won the bid last October because they produced the lowest power purchase agreement (PPA) tariff, and it was the company's prerogative to choose an engineering, procurement and construction (EPC) contract, said the press release.

"The EPC contractor is not the developer or owner of the project. In this case, TNB is the sole head of the project development and holds 100 percent equity," said the Energy Commission.

In December last year, TNB announced that Samsung Engineering & Construction (M) Sdn Bhd would be its EPC partner, and a three-year contract worth RM1.85 billion was signed in January.

'TNB is bound by procedures'

According to the Energy Commission, TNB had made its choice of EPC partner known to the public, even before the commission's tender period closed on July 16 last year.

"To compete in the bid, TNB had chosen Samsung as an EPC partner and used the EPC's cost as the basis for the bid.

"As a state-owned company, TNB is bound by procedures set by the Finance Ministry in the award of the EPC contract, and TNB's board of directors are responsible in choosing the EPC for this project," read the press release.

The Energy Commission said that TNB had fulfilled all of its criteria, and was satisfied with the proper procedures that had been followed in the award of the EPC contract.

The new 1,071MW combined cycle gas turbine power plant is expected to begin its operations on Jan 1, 2016 and has been commissioned to help meet the country's energy requirements by that time.

Critics have pointed out that Malaysia's independent power producers (IPP) have consistently been producing a surplus capacity which has to be borne by TNB, and that these companies enjoy hefty gas subsidies from Petronas.

The federal government has since admitted that first generation IPP companies have been given "favourable" contracts, while the Performance Management and Delivery Unit (Pemandu) said the government had made some "mistakes" in the contract awards.

Samsung: Pic with Najib's son unrelated to Prai project