Reduction in SM-2 Missile Purchase Budget in Supplementary Budget... Military Says "No Impact on Combat Readiness"

Scene of launching an SM-2 missile from the ROKS Yi Sun-sin ship

[Asia Economy Yang Nak-gyu Reporter] The military authorities will reduce the defense budget by 300 billion won to secure funds for the government's third supplementary budget bill (supplementary budget) to overcome the economic crisis caused by the novel coronavirus infection (COVID-19).

According to the Ministry of National Defense on the 2nd, the total reduction in the defense budget related to the third supplementary budget is 297.8 billion won.

Initially, the Ministry of Strategy and Finance was known to cut about 700 billion won in the defense budget for the third supplementary budget, which is about half of the 1.4758 trillion won cut in the defense budget during the second supplementary budget. However, the reduction scale was minimized as it could negatively affect national tasks and defense reform promotion.

According to the Ministry of National Defense, in the defense capability improvement project field that strengthens military power, the entire budget of 70.6 billion won related to the purchase of ship-based air defense missiles was cut. This is the largest cut. This missile is known as the 'SM-2 Block 3B Standard' to be mounted on three Korean Aegis destroyers (KDX-III Batch-II).

The three new Aegis destroyers to be built by 2028 will be equipped with vertical launchers capable of firing ship-based air defense missiles of the SM-3 class (interception altitude over 500 km) that can intercept high-altitude ballistic missiles.

In this regard, the Defense Acquisition Program Administration explained, "Originally, a purchase contract was scheduled to be signed this month between the U.S. government and U.S. companies, but the U.S. side postponed the purchase contract to next year due to internal circumstances, resulting in the return of project funds."

Earlier, at the end of 2018, the military authorities decided to additionally purchase dozens of SM-2 ship-based air defense missiles to be mounted on Korean Aegis destroyers from the U.S. In May of the following year, the U.S. State Department approved a plan to sell 94 SM-2 Block 3B Standard ship-based air defense missiles (313.9 million dollars, about 370 billion won).

The contract for the 'Geomdoksuri-B (Batch-II) project,' which builds about 20 next-generation 230-ton high-speed patrol boats, was delayed (28.3 billion won), and the facility construction related to tactical surface-to-surface guided weapons, delayed due to upgraded protection ratings, was also included in the reduction list (7.8 billion won).

Including these projects, 141.3 billion won was cut from six projects where execution is difficult or unused funds are expected due to purchase contract delays and changes in project conditions caused by the COVID-19 situation.

66 billion won was cut from overseas travel expenses, business promotion expenses, and accommodation expenses expected to be unused due to COVID-19. 3.9 billion won was cut due to bid price differences and exchange gains occurring after contracts, including 2.6 billion won for medical evacuation helicopter facility construction and 1.3 billion won for complex influence mine clearance.

Additionally, among power operation expenses, budgets for facility maintenance (38.6 billion won), training grounds and general education facilities (20.9 billion won), and educational ammunition (13.9 billion won), which were delayed or adjusted due to COVID-19-related facility construction delays, were also cut.

During excavation work for new building construction within the site of the 777th Command, an intelligence unit, a concrete structure was found in the basement, delaying construction and resulting in a cut of 21.7 billion won out of the original budget of 25.1 billion won.

Budget cuts also included operational situation exercises (200 million won) due to training cancellations and reductions, overseas education reductions (2.2 billion won), and reductions in psychological warfare cultural activities (2.1 billion won).

Some voices express concerns that about 1.7 trillion won, approximately 3.6% of the total defense budget, will be cut through the second and third supplementary budgets, potentially causing some setbacks in force modernization.

An official from the Ministry of National Defense said, "I think the Ministry of Strategy and Finance evaluated that we allocated more budget compared to other ministries during the second supplementary budget. It was difficult to find common ground with the Ministry of Strategy and Finance, but the cuts were made within the range that does not hinder force modernization and does not cause problems in the volume or goals of various projects."