India probes SAP and IBM over ancient Air India ERP tender

Procurement process in 2011 deal raises suspicions

Indian authorities want to ask IBM and SAP about potentially criminal actions that saw the two tech giants engaged for a 2011 ERP project at Air India.

The nation's Central Vigilance Commission, a corruption-fighting body, has called upon national crimefighting org the Central Bureau of Investigation (CBI) to take on the case.

The matter concerns an ERP system that Air India sought in 2011. The airline allegedly awarded the deal to SAP and IBM without conducting a tender – in contravention of government procurement rules and perhaps without ministerial approval for the project. It's further alleged that Air India had an Oracle ERP system in place at the time and while that system wasn't perfect – what ERP system is? – the carrier decided to move to SAP rather than remediate.

The Register understands Indian authorities want to understand how and why former Air India chair and managing director Arvind Jadhav chose to work with SAP and IBM.

Indian media report the matter has been filed under laws concerning criminal conspiracy and India's Prevention of Corruption Act. Using those statutes suggests Indian authorities are concerned incentives may have been involved in how the deal landed at SAP and IBM.

Swift resolution seems unlikely – the matter has already been investigated for six years.

The Register has sought comment from IBM and SAP. We'll update this story if we receive substantive replies.

Air India was sold to the Tata Group in 2021, meaning the giant conglomerate re-acquired a business it started in 1932 before its nationalization 21 years later. It's like the Circle of Life, except with planes.

Tata has since embarked on a massive modernization program at the airline, including huge orders for aircraft. So have rival local airlines, as a growing middle class sees more Indians take to the skies.

India's government has made airport construction a priority – partly because expanding roads and railways can be more complex and expensive. Air travel is far more likely to deliver high-speed transport in India's difficult terrain than the kind of rail projects delivered elsewhere. ®

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