South Korea Set to Decide on Purchase of Lockheed F-35As

South Korea is expected to decide this week to purchase Lockheed Martin's F-35A stealth fighters without opening bidding for its new fighter jet program, sources familiar with the matter said Thursday.

The Joint Chiefs of Staff (JCS) will hold a meeting of top commanders on Friday to confirm the required operational capability (ROC), the number of jets and the delivery schedule for the acquisition program, which will be more favorable conditions for the F-35 with advanced radar-evading capabilities.

The Air Force has asked for the government to buy the combat aircraft with a lower radar cross section, one of the key stealth functions, and advanced avionic warfare capabilities.

"The Air Force has not specified the radar cross section in the ROC, but its technical requirements were aimed at selecting the F-35," a senior military official said, asking for anonymity.

The decision comes three months after the South Korean government rejected Boeing's F-15 Silent Eagle -- the only bid within the 8.3 trillion won (US$7.2 billion) budget -- to get a more advanced, radar-evading jet to replace its aging fleet.

Potential bidders have paid keen attention to the upcoming decision as the military requirement is critical for the new competition as the F-35 is the only plane in the running that meets the heightened standards for stealth. Boeing's advanced F-15s and EADS's Eurofighter are considered to have relatively weak stealth capabilities.

As the F-35 is sold only through the U.S. foreign military sales (FMS) program, if it's the sole candidate, it could raise the chance for a government-to-government sale.

Although the Air Force has asked for 60 jets to be delivered between 2017 and 2021, multiple sources said there is a possibility that the total number of jets could be decreased to 40 to meet the budget or that the aircraft will be purchased through a multi-phased program.

The Defense Acquisition Program Administration (DAPA) can extend the funding up to 120 percent of the total budget assigned for the past program, but such a decision needs approval from the finance ministry and the parliament. Assigning an increased budget for the costly fighter acquisition could also draw complaints from other military branches that are eager to upgrade their equipment.

While the FMS program could shorten the acquisition process compared to the competition, the proposed schedule could be delayed one or two years due to a protracted decision, according to military officials.

Unlike the fierce competition for the past project, industry experts say the one-way bid would give Seoul less room for negotiating other conditions such as technology transfer and industrial cooperation in connection with the program.

While Lockheed Martin is keen on the number of jets and estimated budget, Boeing and EADS have raised their sales pitch in case Seoul opts to buy a mix of jets.

Boeing has proposed a mixed purchase of F-15s and F-35s to minimize a security vacuum, while EADS has highlighted an offset deal, including the transfer of technology and industrial participation for South Korea's indigenous fighter jet project for synergies between the aircraft procurement and development program.

In case the total number of jets is reduced, Lockheed officials have hinted at scaling back its offset deal that's based on 60 aircraft, which included developing and launching a military satellite and technology transfer for Korea's indigenous fighter development program, codenamed KF-X.
Friday's JCS meeting will also include a decision on the KF-X project, which aims to build F-16 class fighter jets to replace the Air Force's aging fleet of F-4 and F-5 fighter planes.

South Korea has been seeking to develop a much larger indigenous fighter jet program with the help of major defense contractors, although that has been delayed due to budget constraints and questions over its feasibility.

The state arms development agency has been working on the concept and designs of the aircraft, and has been waiting for the government's approval to start a full-scale project.

Once the JCS endorses plans for the KF-X, local institutes will be able to start the system development from next year, a senior defense ministry official said.

"While the KF-X has been included in the long-term plan, the upcoming meeting will confirm the required operational capability and the deployment schedule," the senior military official said, asking for anonymity. "The military will confirm the requirement, taking into consideration domestic development."

  Previous studies by the Korea Development Institute (KDI) showed that the KF-X would cost at least $6 billion for system development alone and would bring about fewer economic benefits than expected, and total cost for production and maintenance could snowball in the future.

In its 2015-2019 defense plan, the defense ministry estimates the total development cost at about 9.3 trillion won, with plans to allocate the budget to related agencies.

A recent study by the Korea Institute for S&T Evaluation and Planning (KISTEP) pointed out the delayed jet acquisition serves as a setback for the development of the indigenous fighter.

"As (the government) decided to reconsider the fighter jet acquisition, the KF-X hasn't been able to set up technology partnerships with companies," the report said. "The project is currently evaluated as lacking feasibility."

   The report illustrates concerns that Seoul may not be able to get enough support from Lockheed Martin, which sells F-35s under a U.S. arms export control policy that has greater restrictions than those on EADS, the largest aerospace firm in Europe.

While the Agency for Defense Development (ADD) has been working on concepts and shapes of aircrafts, some experts point out that the Air Force has not yet prepared a concrete concept for the aircraft and underestimated its total cost.

Scientists and defense contractors, however, stress the need for government-level efforts to build South Korea's own combat jets with a long-term vision for the aerospace industry.

By Kim Eun-jung - yonhapnews

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