According to recent reports from Yonhap News on the 6th, Indonesia has proposed to pay only about one-third of the originally agreed amount for the development cost of the Korean-made supersonic fighter jet KF-21 to the South Korean government. Indonesia has already paid 300 billion won in development costs for the KF-21 and is now proposing to pay an additional 300 billion won by 2026, totaling 600 billion won.
Back in January 2016, Indonesia had agreed to bear about 20% of the KF-21 development cost, approximately 1.7 trillion won (later reduced to about 1.6 trillion won), by June 2026 in exchange for receiving related technology transfer. However, citing budget constraints, Indonesia is now proposing to reduce the development cost to one-third of the initial amount and receive less technology transfer in return.
Indonesia is currently in arrears for the development cost, reaching up to around 1 trillion won. They had also requested an extension of the deadline for payment until 2034 at the end of last year. When the South Korean government expressed concerns about Indonesia’s proposal to significantly reduce the development cost, Indonesia revised their proposal to commit to full payment by 2026 instead.
A government official stated that they are currently in discussions with Indonesia regarding the revised proposal and that a decision has not yet been made on whether to accept it. If the South Korean government accepts Indonesia’s proposal, it is expected that they will have to allocate an additional 1 trillion won from the government budget out of the total 8.8 trillion won for the complete development cost of the KF-21.
Meanwhile, Indonesian technical personnel who were dispatched to Korea are under police investigation for allegedly leaking core technology of the KF-21, which would be a violation of defense procurement laws. According to the government and investigative authorities, Indonesian technicians working at Korea Aerospace Industries (KAI) headquarters in Sacheon, Gyeongnam Province, were caught trying to leak multiple documents related to the KF-21 development process using a USB drive on January 17th this year. Subsequently, a joint government investigation team, composed of the Defense Acquisition Program Administration, the Armed Forces Counter Intelligence Headquarters, and the National Intelligence Service, has requested a police investigation against the team leader, Mr. A.