The Malabar Cements Employees' Association has demanded a Vigilance inquiry into the purchase of SAP-ERP software for Rs.2.5 crore by the public sector Malabar Cements Ltd. at Walayar.

In a letter to Industries Minister Elamaram Karim on Wednesday, working president C.P. Mohammed, MLA, demanded a vigilance inquiry on the basis of an information technology audit of the enterprise resource planning system installed at the MCL.

The audit report said “the management could not fully derive the benefits of ERP system to achieve transparency and efficiency in the functioning of various divisions primarily because of the lack of participation from the functional heads (BPOs) of the departments. This was evident from the fact that the user requirement specifications were not prepared properly before customisation of SAP system by Keltron through Saptha.”

“As a result, the company could not introduce automation in all areas as expected and continued the manual system in parallel. The objective of improved efficiency and re-deploying the staff to essential area had not been achieved despite spending more than Rs.1.5 crore for implementing this project,” the report said.

Mr. Mohammed said the system was bought without inviting tenders violating the purchase procedure of public sector companies. From the beginning of the project, the association had opposed it stating that the system would bring big financial commitment to the company as it was introduced without assessing its requirements and preparing the ground work.

The statement said that in addition to spending Rs.2.5 crore so far, the Germany-based company that provided the system was demanding Rs.45 lakh every year. Thus it was going to be big financial liability for the company without achieving any result.