₹51 crore project, ₹65 crore contract, ₹90 crore spend: Bescom ERP raises cost questions

Bengaluru

An Enterprise Resource Planning (ERP) project being implemented by the Bangalore Electricity Supply Company Ltd. (Bescom) under the Integrated Power Development System (IPDS) has drawn attention due to differences between the sanctioned scope, awarded contract value, and reported expenditure.

Under IPDS, a flagship Government of India programme funded by the Power Finance Corporation (PFC), Bescom proposed implementation of an ERP system to automate back-office operations with the objective of creating scalable and standardised business processes across the utility. The blrpost.com has accessed multiple documents on this project.

PFC sanctioned the Detailed Project Report (DPR) on February 1, 2018, approving a total cost of ₹51.05 crore for implementation of three ERP modules — Human Resource Management System (HRMS), Finance and Accounts, and Material Management (Purchase and Stores). In addition, ₹0.26 crore was approved towards Project Management Agency (PMA) costs. The approved grant was 60 per cent of the DPR cost, amounting to ₹30.63 crore.

However, Bescom later awarded the ERP project to M/s Tech Mahindra Ltd. on March 30, 2020, for a contract value of ₹65,00,21,000. The awarded contract covers seven modules — HRMS, Finance and Accounts, Material Management, Power Purchase Module, Quality, Standards and Safety, Project Management, and Document Management System with Workflow Management.

Of these, only three modules — HRMS, Finance and Accounts, and Materials — are stated to be under the IPDS scheme. The remaining four modules are explicitly noted as not being under IPDS, though they are part of the same ERP implementation and contract.

The scope of work includes AS-IS study, supply of ERP licences, setting up of Data Centre and Disaster Recovery Centre on a MeitY-empanelled public cloud with 24×7 availability, implementation including design and customization, legacy data migration, training of BESCOM users, maintenance support, and establishment of a centralised ERP helpdesk.

According to Bescom, and as per directions from PFC, activities related to ERP implementation under IPDS have been declared completed for the three IPDS-approved modules — HRMS including employee self-service, Finance and Accounts, and Materials (Stores and Purchase). Implementation of the remaining four modules, along with integration with the three IPDS modules, is stated to be under progress. This is according to the 2024 annual report of Bescom. The sources say that Tech Mahindra has largely completed other modules also. The source stressed that Bescom ended up paying nearly ₹ 90 crore for the project, a significant increase from the original cost.

Financial data included in the project status indicates that while the sanctioned DPR cost for the three IPDS modules was ₹51.05 crore and PMA cost ₹0.26 crore, the approved grant worked out to ₹30.89 crore. Against this, total grants released by PFC so far amount to ₹18.42 crore. At the same time, total expenditure, including PMA costs, is reported at ₹41.90 crore.

The figures show that expenditure reported by Bescom significantly exceeds the grant amount released by PFC till date. The data also shows that a substantial portion of the DPR cost has been spent even though only the three IPDS modules are declared completed, while four other modules are still under implementation.

The project, sanctioned in 2018 and awarded in 2020, thus reflects a scenario where an ERP initiative approved under IPDS for three modules is being implemented through a larger seven-module contract with a higher overall value. The funding arrangements and expenditure pattern for the non-IPDS modules are not detailed in the project information provided.

While Bescom states that the IPDS modules have been completed in line with PFC directions, the project’s expanded scope, higher contract value, and expenditure levels have brought focus on how costs are apportioned between IPDS and non-IPDS components, and how grant-linked milestones align with actual financial outgo.