(DEFENCE SECURITY ASIA) — South Korea is reported to be considering a proposal by Indonesia to reduce its financial contributions in the development program for the 4.5-generation fighter aircraft KF-21 “Boramae.”
Indonesia is now set to pay only one-third of what it was supposed to pay to South Korea in the KF-21 fighter jet development program.
The South Korean defense procurement agency, Defense Acquisition Program Administration (DAPA), confirmed that Indonesia has proposed to reduce its payments for the KF-21 fighter jet development program.
According to DAPA, because Indonesia is reducing its payments, South Korea will also reduce the transfer of technology to Jakarta related to the fighter jet development program.
“Indonesia has proposed to pay US$400 million (RM1.9 billion) by the end of 2026. We are positively considering accepting this proposal by Indonesia,” DAPA said in a statement.
“We are also drafting a plan to adjust the scale of technology transfer in line with the payment reduction by Indonesia.”
Under the original agreement, Indonesia was supposed to pay around US$2 billion (RM9 billion) to South Korea for being a development partner in the KF-21 fighter jet program.
However, it has failed to make several payments, and according to media reports, the last time Indonesia paid its contribution as a program partner was in 2017.
Indonesia holds a 20 percent stake in the KF-21 “Boramae” fighter jet development program but has failed to settle its participation payments since 2017.
Jakarta also plans to acquire a total of 50 units of the 4.5-generation fighter aircraft.
Indonesia and South Korea signed an agreement in 2010 to cooperate in the fighter jet development program, with Jakarta set to receive the fifth prototype of the KF-21 aircraft.
As a cooperation partner in the KF-21 fighter jet development program, Jakarta agreed to pay 20 percent of the total development costs.
South Korea is not only facing payment issues from Indonesia but is also investigating two Indonesian engineers suspected of attempting to steal technology related to the KF-21 “Boramae” fighter jet being developed.
The agency said that both Indonesian engineers were assigned to the KF-21 fighter jet development program and worked at facilities owned by Korea Aerospace Industries (KAI), the sole aircraft maker in South Korea.
According to DAPA, the Indonesian engineers are suspected of trying to store secret data about the KF-21 fighter jet project on USB drives.
The two Indonesian engineers have been barred from leaving South Korea while an investigation is ongoing.
“A joint investigation by relevant agencies, including the South Korean National Intelligence Service, is currently underway to determine the details of the technology theft allegations by Indonesia,” a DAPA official told reporters in South Korea.
The investigation, according to the DAPA official, is focusing efforts on identifying specific documents that the Indonesian engineers are suspected of trying to steal.
Launched in 2015, the KF-21 fighter jet development program aims to replace South Korea’s aging supersonic fighter jets like the F-4 Phantom and F-5.
KAI plans to supply 40 KF-21 Block 1 aircraft designed for air-to-air missions starting in 2026, followed by 80 Block 2 aircraft for air-to-ground missions.
Despite undergoing various tests and now being clouded by allegations of technology theft by Indonesian engineers involved in its development program, the 4.5-generation fighter aircraft KF-21 “Boramae” will begin mass production this year.
The company developing the aircraft, Korea Aerospace Industries (KAI), is reportedly set to spend US$178 million (RM800 million) to start building 40 KF-21 “Boramae” aircraft.
“The first mass production of the KF-21 Boramae aircraft is expected to fill the power vacuum left when the South Korean Air Force decommissions its aging fighter jets,” the country’s defense minister said in a statement last December. — DSA