The Bihar government on Tuesday cancelled 350 contracts worth ₹826 crore in the public health engineering department (PHED) over “gross irregularities”.

The contracts were allotted during the previous Grand Alliance government in the state between August 2022 and January 2024.

“Several contracts related to water supply in rural areas were given during the previous government. A departmental enquiry revealed that rules were not followed in the procedure. We have cancelled them,” PHED minister Niraj Kumar Singh "Bablu" told reporters. He is from the BJP.

These contracts pertained to the installation of water hand pumps and mini water supply systems in rural areas. They were a part of 1,160 tenders worth ₹4600 crore allotted by the PHED during the Grand Alliance government.

PHED officials said that the allotment of tenders reeked of caste-related bias, favouritism and ignoring the allotment rules meant to ensure transparency in the process.

Sources said that with Bihar heading towards Assembly elections in 2025, the Nitish Kumar-led NDA government became worried that allowing the contracts to go on could become one of the reasons for tilting the balance in favour of the Opposition RJD in the rural areas as its leaders would rush to take credit of the schemes.

“Apart from the rules not being followed, there is always a strong possibility of the selected contractors or firms being related directly or indirectly to the ruling party leaders. This also helps the leaders and parties strengthen and expand their influence. The cancellation of the awarded tenders will change the scenario and the BJP will strive to increase its influence,” a source in the government said.