Meghalaya government today scrapped two major power deals made by the previous Congress government with private companies, a decision that could invite serious legal fall-out and economic consequences amounting to nearly Rs 6,600 crore.

"The cabinet has decided to scrap the deals made with Ethena and Jaypee Group for developing the 1100 MW Kynshi and Umngot hydroelectric projects respectively as the deals were done violating the state's power policy," government spokesman and Power Minister Conrad Sangma told reporters.

The deals, he said, were not done through international competitive bidding, as is required as per the power policy.

The proposed investment in these two projects was around Rs 6,600 crore, and the combined capacity is 1100 MW.

"We are aware of the legal and economic consequences of thescrapping. But at the same time we cannot tolerate anything incorrect or wrong," Sangma said.

The two deals were part of a series of agreements signed by the previous Congress government with private companies to develop the state's power projects.

The cabinet decided to go ahead with the deals made for the thermal and hydroelectric projects with capacity of less than 100 MW.

However, fresh MOUs would be signed with the companies incorporating stringent conditions with regards to local employment and other concerns raised by organizations and political parties.