The Department of Energy, Orissa, has cancelled its agreement with Vijayaa Ferro & Power, for setting up a thermal power plant in Kalahandi district, due to inordinate delay in implementation of the project.

The state government had inked an MoU with the company in April 2010, to set up the power plant at Turlakahamar, Kesinga, in Kalahandi district, at a cost of Rs 550 crore. The MoU for the 120 MW (4 x 30 MW) power plant expired in April 2013.

Even after expiry of the MoU, Vijayaa Ferro & Power, had not filed any proposal for extension of the pact with the state government. The company had also signed a power purchase agreement (PPA) with Gridco in 2011, to sell 12 to14 per cent of the power produced from the project, at variable cost.

The state government, after careful examination, scrapped the proposal of the company to set up the thermal power plant.

Vijayaa Ferro & Power is one of the 29 independent power producers (IPPs) with whom the state government had inked MoUs that projected a combined generation capacity of around 37,000 MW. The state's share from these projects was pegged at about 6,000 MW.