25 November 2015

Tech Transfer, Budget Still Matter to KF-X

25 November 2015

KFX fighter (photo : gukjeknews)

Korea's tentative deal with Indonesia to share the costs of the KF-X project, reached Sunday, bodes well for the nation's indigenous fighter program.

The signing is expected to ease concerns over the feasibility of the 8.5 trillion won project that were raised after Seoul failed to receive four core technologies related to the F-35 stealth fighter from Lockheed Martin in April.

However, the transfer of the remaining 21 technologies from the U.S. defense giant and the budget issue still remain major obstacles to completing the project on time. The project is aimed at building new fighter aircraft by 2025 to replace the Air Force's aging fleet of F-4s and F-5s.

Whether or not Lockheed Martin will hand over all of the remaining technologies to Seoul is cited as the biggest matter now. Company officials visited the Defense Acquisition Program Administration (DAPA) last week to discuss and check on the progress of the U.S. government's inspection of the transfer.

The transfer of 25 technologies, including the four, was included in the offset deal in return for Korea's purchase of 40 F-35s, which was signed in September last year.

So far, DAPA has said the U.S. rejection of transferring the four, including the active electronically scanned array (AESA) radar, was anticipated from the beginning as the U.S. strictly prohibits their export for security reasons. But the agency stressed that it would be able to receive the remaining 21 with DAPA Minister Chang Myoung-jin telling reporters that Washington vowed to approve their export.

The state-run procurement agency, however, recently showed a subtle change from its position that the transfer of the 21 technologies, including a flight control system, was a done deal.

Spokesman Col. Kim Si-cheol said last week that it is a contractual obligation for Lockheed Martin to transfer technologies worth $1.41 billion.

"Although the company is changing the technologies to be handed over to Korea from the original list, they should be valued at the agreed upon amount," he said.

Some observers construed the remark as an indication that the list of technologies to be transferred could be changed after the U.S. government inspection.

Regarding the concerns, another DAPA official said, "It is difficult for now to surely say when the discussion of the technology transfer will be complete."

The budget issue is seen as another stumbling block that could deal a heavy blow to the project because an initial budget proposal for next year proposed by DAPA was cut by almost 100 billion won during discussions at the National Assembly.

DAPA had initially requested 161.8 billion won for the KF-X project next year, but the Ministry of Strategy and Finance cut it to 67 billion won in September, which was approved by the National Assembly Defense Committee at the end of last month.

Minister Chang said that if a budget bill approved by the Defense Committee is passed at the Assembly plenary session as it is, the project would be put two to three years behind schedule.


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