The authorities of South Korea and Indonesia have reached a final agreement to reduce Indonesia's share of the system development cost for the domestically produced 4.5-generation fighter jet KF-21 from 1.6 trillion won to 600 billion won.
On June 13, the Defense Acquisition Program Administration (DAPA) announced, "We participated in the 'Indo Defence' defense exhibition held in Jakarta, Indonesia, on June 11-12 (local time), and carried out activities to strengthen defense industry cooperation between the two countries, including the joint development of the KF-21."
Seok Jonggeon, head of DAPA, met with Indonesian Defense Minister Prabowo Subianto and Deputy Defense Minister Doni Ermawan Taufanto at Indo Defence. They agreed to reorganize and expedite cooperation on the joint development of the KF-21, taking the resolution of issues concerning Indonesian technical staff as a turning point. Previously, all five Indonesian engineers dispatched by Korea Aerospace Industries (KAI), who had been under investigation for alleged leaks of KF-21 development data, were cleared of charges and granted suspension of indictment.
As a result, Noh Jiman, head of the Korean Fighter Project Division at DAPA, and the Director General of Reserve Forces at Indonesia's Ministry of Defense signed an amendment to the 'Project Agreement' on joint development, reflecting the adjustment of Indonesia's cost-sharing ratio as decided by the Defense Acquisition Program Promotion Committee in August of last year.
Initially, the development cost for the KF-21 was to be shared as follows: 60% by the government, 20% by Indonesia, and 20% by Korea Aerospace Industries (KAI). Accordingly, Indonesia was to cover about 1.6 trillion won?20% of the total development cost of 8.8 trillion won?by June 2026, in exchange for receiving one prototype aircraft and related technology transfers.
However, except for the 50 billion won paid in the first year of the project in 2016, Indonesia has never paid its annual share as scheduled. So far, Indonesia has only paid 400 billion won toward the KF-21 development. With this revised agreement, Indonesia is now expected to pay just an additional 200 billion won by 2026.
DAPA stated, "The Indonesian Ministry of Defense has begun administrative procedures to pay the remaining share for the joint development of the KF-21," and added, "If the payments proceed as planned, we expect that defense industry cooperation between the two countries will regain momentum."
DAPA also revealed that discussions were held regarding the future mass production of the Indonesian variant of the KF-21 (IF-X). As part of this, Korea Aerospace Industries and Indonesia's state-owned PTDI (a joint development partner) agreed to concretize cooperation from production to marketing for the practical implementation of IF-X mass production.
Seok Jonggeon stated, "Through this visit to Indo Defence, we confirmed that the previously strained defense industry cooperation between the two countries, due to issues involving Indonesian technical staff, is now back on track," and added, "Going forward, we will do our utmost to strengthen defense industry cooperation with Indonesia in various fields such as submarines, firepower, and air defense systems, and to expand cooperation to the entire Southeast Asian region in the future."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
