Jakarta, Seoul to Reboot Indonesia's Stalled Participation in KF-X Jet Project

Indonesia’s participation in the ambitious KF-X jet development project stonewalled by delay in payments is all set be revived with Jakarta working with Seoul on a fresh agreement.

Officials from Defense Acquisition Program Administration (DAPA) and Korean Aerospace Industries (KAI) left for Jakarta on Tuesday. They will meet Indonesian officials on September 23 and 24 to review conditions of the joint development project to strike a deal, The Korea Times reported.

The two sides have held four rounds of renegotiations, the last one being nearly a year ago.

Under original terms, Indonesia agreed to shoulder 20% costs ($1.46 billion) associated with the $7 billion project in return for prototype and rights to build jets in their country. It only paid around $190 million until late 2017. Payments were to be completed by 2026 but now the arrears amount to $426 million.

During the meeting, Jakarta will reportedly ask for a reduction in its contribution to 15%, citing deteriorating economy. In 2019, Indonesia's Coordinating Minister for Political, Legal and Security Affairs Wiranto said the country was considering offering CN-235 aircraft built by PT Dirgantara Indonesia as part of its contribution, instead of cash.

Industry officials said Indonesia also wanted the Korean government to transfer more of the technology for the fighter jet development to Indonesia ― a request that Korea cannot decide alone because some of the technology is linked to the United States.

Meanwhile, Korean aircraft manufacturer Korea Aerospace Industries (KAI) commenced final assembly of a prototype KF-X jet at its assembly line in early September. The prototype is expected to be ready in the first half of 2021. DAPA is eyeing 2026 for the completion of development after ground and flight tests.