CBI files FIR in Air India, IBM officials in Rs 225 cr software procurement ‘scam’

CBI has registered a case against unknown officials of Air India, German firm SAP AG and global computer major IBM in connection with alleged irregularities in procurement of software worth Rs 225 crore by the national carrier in 2011.

The CBI on Friday filed an FIR against unknown officials of Air India, German firm SAP AG and global computer major IBM over alleged irregularities in procurement of software worth Rs 225 crore by the national carrier.

CBI has registered a case against unknown officials of Air India, German firm SAP AG and global computer major IBM in connection with alleged irregularities in procurement of software worth Rs 225 crore by the national carrier in 2011.(HT File Photo)

The premier investigating agency took up the case after it received a complaint in July last year from the Central Vigilance Commission (CVC), which had prima facie found irregularities in the purchase of Enterprise Resource Planning (ERP) software.

An inquiry into the procurement was also done by the chief vigilance officer of Air India.

SAP AG and IBM could not be immediately reached for their comments on the FIR.

A self-contained note from the CVC, which is part of the CBI FIR now, alleged that Air India had similar software system, procured from Oracle, in operation and though the existing system had some problems but no efforts were apparently made to either set it right or upgrade it.

The note also alleged the national carrier didn’t follow open tender system for procurement of the new software and that the other private airlines had purchased the same software at a lower price.

A government press release in February, 2014 had stated that the national carrier “embarked upon implementation of ERP” for Air India and its subsidiary companies for which it opted for System Application Programme (SAP) and the IBM was selected as implementation partner.

“SAP is the worldwide leader in such ERP application and IBM had the experience of SAP implementation in several airlines, globally, and in several Indian companies,” the release had said.

The CVC’s note further said no approval was taken from the ministry of civil aviation for the procurement even though Air India had claimed that it had made a presentation before the Group of Secretaries on July 9, 2009, and before the Group of Ministers in 2010.

The note also alleged that Air India acted on the proposal submitted by the SAP without making any cost estimate and analysing technical specifications.