In this file photo taken March 5, 2024, Hanwha Ocean Co. holds a press conference in Seoul on its claims about HD Hyundai Heavy Industries Co.’s military secret leak. (Image courtesy of Yonhap)
SEOUL, May 7 (Korea Bizwire) — South Korea has been deliberating on Indonesia’s proposal to reduce its payment for a joint development project for the KF-21 fighter jet, the state procurement agency said Tuesday, amid an ongoing probe into an alleged technology leak by Indonesian engineers.
Indonesia has reportedly suggested paying only 600 billion won (US$442.3 million) in total for the KF-21 jet project, after originally agreeing to pay 1.7 trillion won, about 20 percent of the 8.1 trillion-won program launched in 2015 to build the aircraft by 2026.
The Defense Acquisition Program Administration (DAPA) acknowledged that the Indonesian government has proposed a reduction of its financial contribution for the KF-21 project, and final negotiations are currently under way.
“DAPA and related agencies are currently reviewing Indonesia’s offer. We plan to promptly wrap up the final negotiations,” DAPA spokesperson Choi Kyung-ho said during a regular press briefing.
The proposal comes at a sensitive time as an investigation is under way into an Indonesian engineer’s alleged attempt to steal the jet’s technologies at Korea Aerospace Industries (KAI), the manufacturer of the KF-21.
The engineer, who was dispatched after Indonesia agreed to take part in the project, was caught in January attempting to leave a KAI facility with a USB storage device containing data on the fighter jet.
In regard to the concerns over South Korea’s shouldering a greater financial burden for the fighter jet development, DAPA said it will consider various factors when reviewing Indonesia’s proposal.
“We are not just considering the KF-21 joint development with Indonesia but also overall economic cooperation and various other aspects. … We will take these into account and proceed with the discussions accordingly,” Choi said.
Jakarta had initially agreed to pay 1.7 trillion won in return for receiving one prototype model and technology transfers, and producing 48 units in Indonesia but is said to have proposed reducing the payment amount for fewer technology transfers.
It has so far contributed around 300 billion won to the project and has missed payment deadlines, leading to questions over its commitment.
Indonesia is known to have asked South Korea late last year to defer its payment for the project to 2034, but Seoul has maintained its stance that it should be made by the development deadline of 2026.
(Yonhap)
