In a major set-back to Jaypee Group, the Himachal Pradesh cabinet has cancelled the allotment of a cement plant to the company in Churah tehsil of Chamba district citing a reason of failing to meet the extended deadline to start production.

The project was allotted to Jaypee Group in 2006 and a memorandum of understanding (MoU) was signed on February 1, 2007 between Company and HP government for setting up a 2 million tonne per annum capacity cement plant (phase-I) at an estimated cost of Rs 800 crore.

Other defaulter companies have been given time till May 31 to expedite work on allotted projects, failing which their licenses too may be revoked.

Earlier, Govt had issued show-cause notices to five companies, Harish Cements, India Cements, Lafarge and two plants to be set up by JP Industry. However, after finding the reply of JP Cements for its proposed plant in Chamba unsatisfactory, Cabinet decided to cancel its licence.