Will President Widodo’s visit settle KF-X payment issue with Indonesia?

Will President Widodo’s visit settle KF-X payment issue with Indonesia?

A KF-21 Boramae takes off at the third Flying Training Wing of the Air Force in Sacheon, South Gyeongsang Province, Tuesday, for its first flight test. Courtesy of Defense Acquisition Program Administration

Indonesian president arrives in Seoul, Wednesday

By Kang Seung-woo

Although the domestically developed KF-21 Boramae fighter jet took to the skies for the first time last week, the issue related to Indonesia`s payment for the joint fighter jet program is still grounded as Jakarta has yet to keep its word to pay its share of the total cost.

However, there is a glimmer of hope for a settlement of the overdue payment problem, as Indonesian President Joko Widodo will make a visit to Korea to hold a summit with President Yoon Suk-yeol, during which the two leaders are expected to discuss and reach a conclusion on the issue.

The KF-X project is aimed at manufacturing a fighter plane with higher capabilities than a KF-16.

Korea and Indonesia signed a deal in 2010 to cooperate on the project, under which the Southeast Asian country would fund 1.6 trillion won, amounting to 20 percent of the total development cost of 8.8 trillion won ($6.71 billion), in exchange for a number of planes to be manufactured there for the Indonesian Air Force, as well as technology transfers. But Indonesia has been defaulting on the deal, failing to pay 800 billion won it promised as of this month, citing financial problems.

The Indonesian leader’s trip to Korea carries extra significance as the KF-21 aircraft completed its first-ever flight test successfully on July 19, after the project was initiated over two decades ago.

During the flight, the fighter jet flew with the Korean and Indonesia flags attached in tandem on its body to mark the joint project.

“The payment issue is anticipated to be discussed during the summit,” said a senior official of the presidential office.

In November last year, the two countries re-agreeed that Indonesia would pay 30 percent of the total amount, although Indonesia canceled the agreement.

“The change of government in South Korea failed to amend the contract by the end of the first quarter, but Indonesia is still working on the KF-X, as evidenced by 39 engineers from Korea Aerospace Industries (KAI). And I believe the payment problem will be resolved soon. ” KAI is the only aircraft manufacturer in Japan that manufactures the KF-21.

Shin Jeong Woo, a senior researcher at the Korea Defense Security Forum, also represented. A similar view.

“The Defense Acquisition Program Administration (DAPA) has decided not to deliver the KF-21 to Indonesia without paying shares. In addition, the success of the KF-21’s first flight is due to late payment when Widdo comes here. It will play a positive role in dealing with the problem, “Shin said.

 

Shin, who recently attended the Farnborough Airshow, said the KF-21 was getting a lot of attention.

“In that respect, Indonesia, which was enthusiastic about the KF-X project, is quite enthusiastic,” he said. Representatives of the defense industry were also looking forward to a visit to Widodo to help get the joint development project back on track.

“I hope Widdo’s journey will bring good results to the KF-X program,” he said.

Indonesian President Joko Widodo / Korea Times file

Within Indonesia’s defaults, speculation was rampant that the country might withdraw from the KF-X program. In addition, the purchase of Rafale Jet during bankruptcy contributed to the speculation.

However, in November last year, DAPA and its Indonesian representatives negotiated several times to conclude that Jakarta’s 20% cost share and payment period from 2016 to 2026 will be maintained.

Singh said Indonesia would not be easy to withdraw from the KF-X program due to the lack of stealth-capable 4.5-generation fighters.

“The Rafale, which Indonesia recently decided to buy, is not a stealth fighter, so the KF-21 is a more attractive option and the country cannot ignore,” he said.

 

Credit/Source : KoreaTimes

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