Indonesia US$200m in arrears on fighter project

SEOUL: Indonesia has demanded new terms from South Korea on a joint multi-billion-dollar jet fighter development project, as Seoul said Monday that Jakarta has not paid its share and is US$200 million, (RM831 million) in arrears.

The Korean Fighter Experimental (KF-X) project is an 8-trillion-won project to develop and build a fleet of 120 “indigenous” next-generation multi-role warplanes to replace Seoul’s ageing US F-4 and F-5 fighters.

Korea Aerospace Industries and US aerospace giant Lockheed Martin are the main contractors on the project, with US conglomerate General Electric to supply the engines.

Jakarta signed a deal in 2016 to become the project’s junior partner, covering 20% of the costs and receiving one prototype plane, with up to 100 Indonesian workers taking part in the development and production process.

But it stopped paying its share of the costs last year, the South’s Defense Acquisition Program Administration, which handles the procurement of military equipment, said Monday.

“We plan to hold additional negotiations for the payment of Indonesia’s contribution,” DAPA’s spokesman said.

Jakarta’s chief security minister Wiranto, who like many Indonesians uses only one name, said however Friday it was looking to rewrite the whole deal.

“With the state of the national economy,” he said in a statement, President Joko Widodo had “decided to renegotiate the terms”.

The Indonesian rupiah has sunk to 20-year lows, making payments more expensive.

Jakarta was seeking changes to cost-sharing, production costs, technology transfer and intellectual rights, Wiranto said in a statement.

“It is definitely not final because we need time,” he said. “Hopefully this will be solved in less than a year”.

However the DAPA spokesman insisted the joint programme would continue and the aircraft would go into service as scheduled in 2026 to defend the South.

Neighbouring North Korea is subject to multiple sets of UN Security Council sanctions over its nuclear and ballistic missile programmes. — AFP

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