Starting Today, South Korea and Indonesia Begin KF-X Renegotiations

Jung Kwang-seon (54), a retired Air Force brigadier general, has been appointed as the head of the Korean Fighter Program Division at the Defense Acquisition Program Administration, which will lead the development of the Korean Fighter eXperimental (KF-X) system.

[Asia Economy Yang Nak-gyu, Military Specialist Reporter] Our government delegation will depart on the 22nd to renegotiate the Korean-style next-generation fighter (KF-X) project with the Indonesian government. Indonesia agreed to bear about 20% of the development cost, amounting to 1.7338 trillion KRW, out of the total 8.7 trillion KRW for the jointly developed KF-X project with Korea. However, since the second half of 2017, Indonesia has delayed payment of approximately 500 billion KRW in contributions, raising interest in how they will propose a payment plan.

According to government officials on the day, recently Park Tae-sung, the Ambassador to Indonesia, met with Indonesian Defense Minister Prabowo Subianto to discuss the renegotiation plan for KF-X. At that time, the Indonesian side reportedly proposed ▲ lowering the KF-X project contribution ▲ increasing technology transfer to their country ▲ paying in kind instead of contributions ▲ exempting interest on overdue development costs. Indonesian President Joko Widodo also expressed his intention to renegotiate by requesting a reduction of the KF-X project contribution rate from 20% to 15% when he visited Korea in September 2018 and met with President Moon Jae-in.

A government official said, "Although difficult issues may arise in the renegotiation after one year, we will do our best to ensure the normal progress of the KF-X project."

The negotiation team, consisting of about 10 members including Kang Eun-ho, Deputy Director of the Defense Acquisition Program Administration (DAPA), and Korea Aerospace Industries (KAI), is expected to present a negative view on Indonesia’s proposals to reduce development costs or pay in kind. This is because securing funding would be difficult if Indonesia does not pay the development costs. It is also not easy to get the National Assembly’s approval for an additional defense budget exceeding 1 trillion KRW when preparing a supplementary budget related to the COVID-19 pandemic. Another variable is that the planned number of fighter jets to be produced may decrease, inevitably raising the KF-X price above the previously estimated cost. Currently, according to the mass production plan, the price per KF-X unit is estimated to be in the 80 billion KRW range.

The KF-X project is a national initiative to develop the latest domestic fighter jet to replace air force fighters that have been in operation for over 40 years. KAI has currently passed the detailed design phase and started prototype production. The first prototype is scheduled to be delivered in the first half of next year, with initial flight tests beginning in 2022 and development completion planned for 2026.

This content was produced with the assistance of AI translation services.