General Electric (GE) of the United States was selected Thursday as the preferred bidder to supply twin engines for Seoul's indigenous fighter jets, according to the Defense Acquisition Program Administration (DAPA).
"GE's F414-GE-400 engine was picked over European engine maker Eurojet's EJ200 engine," DAPA spokesman Col. Kim Si-cheol said after a subcommittee meeting that made the decision.
The fighter-jet development project, KF-X, is aimed at locally developing the twin-engine combat jets equipped with state-of-the-art aviation electronics equipment by 2026 to replace the Air Force's aging fleet of F-4s and F-5s.
Developing the fighter is estimated to cost 8.5 trillion won ($7.2 billion), with an additional 10 trillion won needed to produce 120 jets by 2032.
The DAPA said that it chose GE over Eurojet after considering various aspects including the engine performance, price, offset program and technology transfer.
Sources familiar with the issue told reporters that the price was a decisive factor in the selection of the American infrastructure and technology firm.
Observers in the defense sector have also speculated that GE had a competitive edge because Korea Aerospace Industries (KAI) has used GE's products when developing the T-50 supersonic trainer and the Surion utility helicopter.
KAI, the nation's sole aircraft maker, signed a contract with DAPA at the end of last year to manufacture the fighter jets.
KAI will continue the further negotiations with GE and sign a formal contract by as early as next month.
The F414 has been selected to power fighter jets in Australia, Brazil, India, Sweden, Switzerland and the United States. More than 1,500 F414 engines have been sold around the globe, according to GE.
GE Korea CEO Chris Khang told reporters last year that GE will transfer its manufacturing technology, as well as maintenance, repair and overhaul capabilities, if it is chosen to work with KAI.
The DAPA said it plans to finalize the basic designs for the KF-X by September next year and come up with a detailed design by January 2019.
The KF-X project has been boosted by the U.S. government's pledge to transfer some of its jet technologies.
But Seoul is still facing the challenge of finding an alternative as Washington made it clear that four core technologies will be excluded.
On April 20, Hanwha Thales, the defense arm of Hanwha Group, was selected as a preferred bidder to produce active electronically scanned array (AESA) radar for the KF-X.
The AESA radar was among the four technologies that the U.S. rejected to transfer to Korea. The other three were infrared search and track (IRST), electronic optics targeting pod (EOTGP) and radio frequency (RF) jammer.