Indonesia seeks reduction in share of expenses in joint fighter jet project

Indonesia is seeking a reduction of its share of expenses in the fighter jet development project with South Korea, as it is running about 300 billion won ($254 million) in arrears.

According to Indonesian news reports, Indonesia’s Coordinating Minister for Politics and Security Wiranto reiterated the need to renegotiate the deal for the Korean Fighter Experimental, citing the government’s lack of budget.

Korea and Indonesia have been working together to develop a new fighter jet for the air forces of the two countries since striking an agreement in 2010. Under the arrangement, the $8 billion cost of the project is to be divided between South Korea and Indonesia, with Korea paying 80 percent. 

Wiranto, however, stressed that Indonesia is not seeking to withdraw from the project, and does not want to “disturb the long-standing friendship with South Korea,” Indonesian news outlet Kompas reported Thursday.

The country also does not want to lose the opportunity for the technology transfer the program would offer, Wiranto added.

According to South Korea’s Defense Acquisition Program Administration on Monday, Indonesia had paid about 220 billion won of its share of 1.7 trillion won as of Monday. The first deposit was made in 2016. Since paying 132 billion won early this year, there have not been any additional payments from Indonesia, and it is running about 300 billion won in arrears as of July, DAPA said.

While admitting that they have been renegotiating the deal since early this year, the Korean government refused to elaborate on details of their talks.

“The negotiation between the two countries are ongoing, and the two sides have agreed to keep it closed to the public,” DAPA spokesman Park Jeong-eun said.

The Indonesian Coordinating Ministry had said it would renegotiate its involvement in the joint project for “lighter” economic commitments, citing its national economic conditions, in a statement in October last year.

“Aside from the financial problem, the development of the fighter jets is going smoothly. We do not see that Indonesia will withdraw from the project,” an official from Korea Aerospace Industries, which is participating in the project, told The Korea Herald.

According to the official, 32 more Indonesian personnel are set to arrive in Korea in August, adding to the current 80 working here.

The Critical Design Review meeting is also expected to take place in September, in which the two sides will review the development of the project. It would then lead to building an actual prototype of the fighter jets, the official said.

The KFX/IFX project is aimed at producing semi-stealth fighter aircraft of generation 4.5. From the program, the two countries will build 168 units, of which 120 will belong to Korea.

The warplanes are expected to be equipped with semi-conformal missile launchers, advanced avionics and air-refueling functions.

The KFX project is South Korea’s second domestic fighter jet development program, first proposed in 2001.

By Jo He-rim (herim@heraldcorp.com)