Concerns Over South Korean KF-X Jet project As Indonesia Skips Milestone Payments

Indonesia has ran up an arrears of 230 billion won (US$200 million) by skipping milestone payments as part of its participation in the South Korean-led KF-X project to develop a new fighter jet for use of the air forces of both countries.

Further Indonesia has ‘stayed away’ from the aircraft development program since the latter half of 2017, calling for the renegotiation on the terms of contract, Seoul's arms agency confirmed Monday.

However, Indonesian Investment Coordinating Board (BKPM) head Thomas Lembong had said last week in Jakarta that while renegotiations were under way, Indonesia would disburse funds for the project to assure that Indonesia was committed to proceeding.

The Indonesian government had a total of 230 billion won (US$200 million) in arrears as of June, according to the Defense Acquisition Program Administration (DAPA), whose spokesman Kang Hwan-seok told this to reporters in Seoul today.

Indonesia has an agreement with South Korea to pay for 20 percent of the cost to develop a 4.5 generation fighter jets by 2025. In return Indonesia would get a prototype and the rights to manufacture the aircraft in Indonesia.

"There was a request (from Indonesia) to negotiate" its contribution, the DAPA spokesman told reporters here sparking concern s about the future of the KF-X project, although Kang said there's no immediate threat of Indonesia’s withdrawal from the program.

There are also concerns that denial of four crucial technologies by the United States relating to radar and fire control system among others would delay the project as South Korea has vowed to develop these on its own.

It is not known if South Korea has agreed to renegotiate the financial participation of Indonesia in the wake of reports that the project cost might exceed the original budget.