Korea Aerospace Industries Ltd. signed a deal with Indonesia on Sunday, clinching the Southeast Asian country's partnership in a lavish local fighter jet development program.
Under the preliminary contract, Indonesia will shoulder 20 percent, or 1.7 trillion won ($1.5 billion), of the program's 8.7 trillion-won cost to develop the advanced multi-role combat jet, according to the airplane manufacturer.
The Korean Fighter Experimental program is designed to develop and mass-produce homegrown dual-engine combat airplanes by 2025. It's one of the most lavish defense procurement projects here with more than 8 trillion won in development costs in addition to 10 trillion won to be spent in mass production. KAI is South Korea's contractor manufacturer of the program.
With the partnership, Indonesia will be entitled to purchase 50 new planes.
Under the deal signed Sunday, Indonesia will be able to take part in the designing of the airplane, as well as in the production of components for the program.
It will also be entitled to acquire the aviation technology of the project and bring home one experimental airplane, according to KAI.
"All the specifics have been agreed upon with the Indonesian side, regarding the KF-X development," said Jang Sung-sub, director of KAI. The KAI-Indonesia deal will be finalized after KAI signed its final agreement with the South Korean government as the contractor of the project later this year.
The latest deal will help expedite the local project, which has been criticized by the National Assembly, as well as the public.
The program was dealt a major blow after the U.S. Department of State refused in April to approve U.S.-based Lockheed Martin's transfer of four core aviation technologies for the South Korean project.
Speculation had also circulated that Indonesia might take back its offer to form a partnership first committed in 2011.
In addition to the 120 and 50 units to be delivered to the South Korean and Indonesian air forces, respectively, KAI plans to produce up to 600 units of the new airplane to sell them overseas, another KAI official said. (Yonhap)