Korea and Indonesia are working on a new agreement for their joint fighter jet project, which has hit a snag following Indonesia's delay in paying hundreds of millions of dollars.
About 10 officials from the Defense Acquisition Program Administration (DAPA) and Korean Aerospace Industries (KAI) ― the maker of the KF-X aircraft ― left for Jakarta, Tuesday, to meet Indonesian officials on Wednesday and Thursday, according to the two organizations.
The joint fighter jet project is called the KF-X (Korean Fighter eXperimental) in Korea and the IF-X (Indonesian Fighter eXperimental) in Indonesia.
While the two sides have held four rounds of renegotiations, the latest talks come after about a year. It is also the first meeting since Indonesia's Defense Minister Prabowo Subianto took office last October. Subianto had been putting off resuming talks with the Korean government, saying he would review the overall content of the country's defense budget and weapons systems.
During this week's meeting, officials of the two countries are expected to review conditions of the joint development project to strike a deal, as Indonesia wants a reduction in how much it promised to pay the Korean government.
Indonesia initially agreed to pay 1.7 trillion won ($1.46 billion), which accounts for about 20 percent of the total 8 trillion won project budget. But it has only paid about 220 billion won. It stopped paying in late 2017, citing the country's deteriorating financial situation.
While payment is supposed to be completed by 2026, the arrears are around 500 billion won.
According to industry officials, the Indonesian side wants to reduce its contribution from the promised 20 percent to 15 percent. The proposal was raised by Indonesian President Joko Widodo when he met President Moon Jae-in during a visit to Korea in September 2018, according to the officials.
Last year, Indonesia's Coordinating Minister for Political, Legal and Security Affairs Wiranto said the country was considering offering CN-235 aircraft from the country's state plane maker 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, the fighter development by KAI is going smoothly, with the manufacturer set to roll out the prototype in the first half of 2021. Earlier this month, KAI started assembling the prototype of what will be the country's first indigenously developed fighter jet.