[Yang Nak-gyu's Defence Club] Indonesia Finally Fails to Notify Contribution Plan

Failure to Notify Payment Plan for KF-21 Joint Development Funds
Over 800 Billion Won Overdue to Date

Indonesia, the co-developer of the domestically produced supersonic fighter KF-21, has failed to keep its promise to inform South Korea of its plan to pay the overdue contribution of around 800 billion won by the end of June.

On the 3rd, Yoo Hyung-geun, the Public Relations Officer of the Defense Acquisition Program Administration (DAPA), said at the Ministry of National Defense regular briefing in response to related questions, "Indonesia has not notified us of its plan to pay the contribution by the end of June."

Indonesia agreed in January 2016 to bear 20% of the KF-21 development cost, approximately 1.7 trillion won (later reduced to about 1.6 trillion won), by June 2026 in exchange for receiving one prototype and various technical data, and to locally produce 48 fighters in Indonesia. However, after paying only 227.2 billion won by January 2019, Indonesia did not pay the contribution for nearly four years citing budget shortages, and only made additional payments of 9.4 billion won in November last year and about 41.7 billion won in February this year.

According to the plan, Indonesia should have paid more than 1.1 trillion won by now, but it has only paid 278.3 billion won, currently overdue by more than 800 billion won.

Earlier, on May 9, Eom Dong-hwan, head of DAPA, told reporters at the Korea Aerospace Industries (KAI) headquarters in Sacheon, Gyeongnam, "Indonesia promised to notify South Korea of its payment plan for the outstanding overdue contribution by the end of June."

According to Indonesian local daily Kompas and others, Prabowo Subianto, Indonesia’s Minister of Defense, said at a press conference at the Presidential Palace on the 26th of last month, when asked whether South Korea demanded Indonesia to disclose its KF-21 contribution payment plan, "We will fulfill our promise."

Some voices of concern have emerged as the current system requires completion of a feasibility study to secure next year’s budget, which is estimated to be around 1 trillion won. The delay in the feasibility study raises worries. Considering that the Ministry of Economy and Finance must submit the budget proposal to the National Assembly 90 days before the fiscal year, in early August, it means that the mass production cost cannot be included in next year’s government budget proposal.

Public Relations Officer Yoo said, "We will continuously work with the government and companies to ensure that Indonesia’s non-payment does not affect the project," adding, "We plan to confirm Indonesia’s intentions through high-level talks and then devise countermeasures."

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