KFX / IF-X (Korea/Indonesia Fighter jet Experimental)
The future generation aircraft being developed by Korea Aerospace Industries (KAI) is designed to be a cheaper alternative than a fighter jet F-35 stealth Lockheed Martin made in the United States. South Korea and Indonesia agreed in 2014 to jointly develop the KF-X / IF-X in a 7.5 trillion won (USD6.33 billion) project, under which Indonesia agreed to pay 20 percent of the project cost.
Indonesia and South Korea talked about the possibilities of producing KFX / IF-X (Korea/Indonesia Fighter jet Experimental) fighters. The KFX project was forged in 2009 when Purnomo and his South Korean counterparts signed a memorandum of understanding during current South Korean President Lee Myung-bak’s visit to Indonesia in 2009. Indonesia has taken a huge gamble in a deal with South Korea to manufacture a new type of fighter plane, with a real risk that the project could end in disaster. The initial stage of the deal was estimated to cost $8 billion, with Indonesia required to shoulder 20 percent of the cost, or around $1.6 billion. The rest would be financed by South Korea. Defense Minister Purnomo Yusgiantoro said in July 2011 that the planes were expected to be ready by 2020, with Indonesia set to buy 50 of an estimated 200 units expected to be produced under the KFX project.
The partners agreed to produce approximately 150-200 aircraft, of which Indonesia would get 50, sufficient to equip three combat squadrons. Jakarta expected the first KF-X to be ready by 2018. The government had earmarked around Rp 1.35 trillion ($158 million) for the project to be released during the next four years as the project entered its production phase. The first phase would cover 18 months of technical development through 2013, after which five prototypes were expected to be built — four on South Korean soil and one in Indonesia.
The Indonesian Air Force had initially indicated it was interested in the Russia-India PAK-FA multirole fighter. Later it joined South Korea as a junior partner to jointly develop the Korean Fighter-Experimental (KFX). But things didn’t work out as planned.
Like every ongoing stealth fighter in the world today, the costly KFX project hit turbulence. According to Forbes magazine, the US doesn’t trust the South Koreans with four “core technologies” needed for the project. It adds: “The Koreans have professed bitter disappointment over the refusal of the US to entrust its ally with the highest-tech stuff they say is needed for the KFX not only to have stealth capabilities but to be able to find and track hostile targets with the latest state-of-the-art radar.”
In 2018 Indonesia attempted to renegotiate the agreement to take the pressure off its foreign reserves and has since offered to pay its share of project costs in the form of bartering. The KF-X / IF-X program also ran into bottlenecks when South Korea was forced to develop key technologies after the United States refused to grant approval for the use of some systems, such as radars, now being developed by Hanwha Systems.
South Korea is a "reliable" partner in terms of defense cooperation equipped with "world-class" defense capabilities and weapons systems. That's President Moon Jae-in as he met with the visiting defense minister of Indonesia Prabowo Subianto at the Blue House 08 April 2021. Indonesia's defense chief was in South Korea for the 09 April 2021 rollout ceremony for the prototype fighter jet, the KF-X jointly developed and produced by the two countries. Moon added that their joint project is a symbol of trust and cooperation. In response, Minister Prabowo promised to further enhance the bilateral relationship.
It is known that they have not yet resolved the issue of payment of contributions to Indonesia's KFX business. It was unclear whether Indonesia will continue to participate in the KFX business, given the problem of non-payment of contributions, which is the biggest obstacle to the business, has not been resolved. The issue of ante is not mentioned in the bilateral talks. It is known that the two countries will continue to negotiate the issue of contributions at the working level.
Indonesia, which had decided to pay 1,733.8 trillion won, 20% of the total KFX development cost of 8 trillion won by 2026, had only paid 2272 billion won. 64.4 billion won has not been paid from the target by 2021. Indonesia, which had complained of the economic hardship, is known to have requested the Korean government to reduce its share of the cost to 10% at the end of last year. In addition, it was reported that if it was difficult to reduce the share of the KFX, Indonesia requested the Korean government to support the construction of a local production facility and a loan worth $5 billion. In addition, as Indonesia was known to be prioritizing the purchase of French Rafale fighters, there were concerns in Korea over whether Indonesia was trying to get out of the KFX business.
Out of the 831.6 billion won due in February 2021 due to economic hardship, etc., 644.4 billion won was overdue, and in March, 114 technicians dispatched to the Korea Aerospace Industry (KAI) in Sacheon, Gyeongsangnam-do were withdrawn to their home country. Indonesia planned to acquire some South Korean military hardware, including the KT-1B Wong Bee turboprop basic training aircraft, supersonic advanced jet trainers, T-50 Golden Eagle light combat aircraft, and Changbo-Go class submarine.
Indonesian Defense Ministry spokesperson Dahnil Anzar Simanjuntak said in a statement 06 April 2021 that the government would proceed to the next phase of renegotiations regarding the country’s share of the bill for the development of the KFX/IFX. “The government is set to renegotiate [Indonesia’s] share of the cost, as well as the project’s sustainability,” Dahnil said. He added that South Korea had yet to agree on Indonesia’s previously stated terms, which entailed reducing the latter’s share of the development cost to 15 percent from 20 percent. “[Indonesia’s share of the cost] was only reduced to 18.8 percent,” Dahnil added. South Korea had agreed to renegotiations during President Joko “Jokowi” Widodo’s visit to the country in 2018 but required them to be completed within a year.
The project agreement was signed in 2015 [ratified in 2016] and initially the first prototype was scheduled to be produced by 2019. The fifth prototype was expected to be produced at state-owned aircraftmaker PT Dirgantara Indonesia in Bandung. Indonesia initially aimed to make the jet fighters operational by 2025. Indonesia had sought renegotiations because according to the previous provisions, Jakarta would have had to spend hundreds of trillions of rupiah on the project. Indonesia had spent $10 million on the research stage of the project since 2016.
As of April 2021 Indonesia had not made its milestone payments after the initial tranche of 227.2 billion won ($203.4 million). In addition, Jakarta has not sent back Indonesian personnel working in Korea Aerospace Industries factory that were withdrawn when the COVID-19 pandemic hit in 2020. Reports of Jakarta losing interest in the IF-X project had been exacerbated by its consideration of the French Rafale or Boeing F-15 EX combat jets to quickly refurbish its fleet in the face of threats from China over control of maritime resources.
By May 2024 the ROK government was set to decide whether to accept Indonesia's proposal to reduce its contribution in the joint development of the KF-21 fighter jet to one-third of the previously pledged amount. According to Defense Acquisition Program Administration(DAPA) spokesperson Choi Kyung-ho on 07 May 2024, the two sides have closely cooperated on the contribution payment and that a final consultation is under way. DAPA is reportedly seeking to reach a decision through its business project committee at the end of this month following consultation with the defense and finance ministries.
Indonesia had agreed to shoulder 20 percent of the total project cost, amounting to one-point-seven trillion won, or approximately one-point-three billion U.S. dollars, by June 2026, while manufacturing 48 jets after receiving a prototype and technology documents from South Korea. Having accumulated an overdue payment of around one trillion won, Jakarta has recently suggested covering a total of 600 billion won, or about a third of the initial contribution, while also reducing the technical transfer. Some, however, suspect that Indonesia may be requesting the reduction, after securing the jet's technological data from its engineers, who were caught earlier this year over an alleged data leak attempt while being dispatched to South Korea's KF-21 manufacturer.
“Continued failure to make payments at a point when we are approaching systems development and fielding, may cause delays in development. If decisions regarding shared costs are pushed back, it’s expected to have an impact on the fielding of the K-21 fighter,” DAPA announced. If Jakarta’s financial contribution is slashed to one-third of its original pledge, then the previously reached agreements regarding technology transfer may also be adjusted. DAPA has also mentioned that it will “review” former agreements to provide test KF-21 fighters to Indonesia.
The KF-21 joint fighter development program was originally scheduled to take place from 2015 to 2026. The original agreement had Indonesia contributing 20% of the total costs of 8.1 trillion won (US$5.92 billion), which amounted to around 1.6 trillion won (US$1.17 billion). It also contained an agreement to transfer the technology for building the fighter to Indonesia. Yet after consistently falling behind on payments, Indonesia has proposed that it pay only 600 billion won in total by 2026.
Some observers speculate that Indonesia has already acquired the technology it was after, and is now seeking to split without paying the check. In response, DAPA has announced that “technology leaks and financial contribution are two separate issues.” The technical team that Indonesia dispatched to Korea Aerospace Industries, which has been tasked with building the KF-21, was caught trying to steal key documents containing technical secrets.
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