Against SAP initiated proceedings for obtaining the contract from state airline out of the competition

2017: Initiation of proceedings

In January, 2017 the Central bureau of investigations (Central Bureau of Investigation, CBI) India initiated in the relation of the companies Air India, SAP and IBM case on suspicion of collusion and fraud when purchasing the software.

The Central supervising commission (Central Vigilance Commission, CVC) which had information that in 2011 Air India bought ERP software of SAP without any tender addressed to CBI, at the same time at that time the state-owned airline already used a similar system from Oracle. Air India officially did not notify the ministry of civil aviation of India on change of the key platform though the management of airline claimed that plans of transition to a SAP software were announced to the government in 2009 and 2010.

Passenger airplanes of Air India company

According to the investigation, Air India had some problems in work with the system of Oracle, however the airline did not make an attempt to eliminate errors or to update the software.

CBI sent to the German authorities an inquiry for providing information on some persons connected with SAP and participating in signing of the contract with Air India. Also CBI is going to file a lawsuit the claim in connection with the detected "severe violations" during the purchasing of software and payment of services.

The Central supervising commission asked CBI to check whether someone from the government could get a bribe for out-of-competition signing of the contract and also find the staff of IBM who, perhaps, was involved in the illegal transaction. Neither in Air Idnia, nor in SAP, nor in IBM did not give comments of media about the made investigation.^[1]

2011: Signing of the contract

At the beginning of 2011 one of the largest Indian airlines Air India signed about the SAP contract for system implementation of enterprise resource planning (ERP). Order cost was 2.25 billion rupees (about $33.6 million). IBM acted as integrator in this project.