Korea Purchases 40 Lockheed Martin F-35 Jets
D-bo, Sept. 25, 2014, 8:51 a.m.
Korea has finally decided to buy 40 Lockheed Martin F-35As for the epically delayed project to acquire new-generation fighter jets. The F35A was the sole qualified candidate after several rounds of abortive bidding and will cost a massive W121 billion (US$1=W1,039) each.
A session of the Defense Project Promotion Committee chaired by Defense Minister Han Min-koo approved the procurement on Wednesday, reflecting a fresh round of negotiations, a Defense Acquisition Program Administration spokesman said.
"We held negotiations from March to September on technology transfer, price, and trade-off conditions and decided to purchase 40 F-35As," spokesman Baek Yoon-hyung told reporters.
DAPA decided to spend W7.3 trillion on the purchase between 2018 and 2021. Sixty-six percent of the money will be spent on the purchase of the jets and engines, 26 percent on logistics support, and eight percent on equipment and armaments. A DAPA source said the price could be reduced further from W121 billion.
The unit price is already less than the W230-250 billion Japan agreed to pay when it signed a procurement contract for F35s in 2011. But DAPA is getting flak for buying only one backup engine for the 40 jets under the deal, rather than the usual four to six or 10 to 15 percent of the entire contingent. Lockheed Martin reluctantly agreed to transfer 17 technologies, including jet building and flight control.
Meanwhile, DAPA also decided to implement a project to deploy 120 new home-grown fighter jets warfare-ready beginning 2025. The total development cost is estimated at about W8.5 trillion. Indonesian firms will bear 20 percent of the cost and other firms from Korea and elsewhere will also bear 20 percent, with the Korean government paying the rest.
The fighters will be mid-size twin-engine jets with a top speed of some Mach 1.97. The question is how to secure the astronomical development cost. The Defense Ministry has asked the Ministry of Strategy and Finance for W100 billion as next year's budget, but the Finance Ministry cut that down to a mere W30 billion. After posting a tender notice for private-sector participants, DAPA hopes to select a preferential partner in November and sign the contract in December.