DND: No consensus yet on P18.9-B fighter jets' purchase

MANILA, Philippines - The Philippines and South Korean firm Korean Aerospace Industries (KAI) are still hurdling issues related to the military’s plan to buy 12 lead in fighter trainer jets worth P18.9-billion.

Defense Undersecretary Fernando Manalo admitted on Monday that they have yet to reach consensus on some issues including the down payment to be given to the supplier and the period of delivery of spare parts.

“The lead in fighter (project) is within the process of negotiation with the government of South Korea and there are major issues, there are several issues that we still have to hurdle,” Manalo said in a press conference.

Among the issues to be threshed out is the advance payment to be given to KAI.

Manalo said the law allows state agencies to pay a 15 percent down payment while the rest of the amount would be paid upon the delivery of goods.

KAI wants the Philippines to pay a 52 percent down payment but Manalo said this would require the approval of President Aquino.

“The approval of a down payment that is more than 15 percent does not rest on the BAC (Bids and Awards Committee). It will be up to the president,” Manalo said.

“Even if we consider their request on the terms of payment and more progressive billing, we cannot do it. We can only recommend to the president,” he added.

Another issue being threshed out is the turnaround time, the period required for the delivery of the jets’ spare parts under a two-year warranty.

Manalo said the turnaround time usually lasts for 30 to 45 days but KAI wants it prolonged to 180 days.

When asked whether he is still optimistic that the issues surrounding the project will be resolved, Manalo said: “This project should push through but we cannot continue without looking at it and ensuring that aircraft we will buy won’t be left unused without the spare parts.”

Manalo said they would decide whether to push through with a deal with KAI within the year.

“We are already preparing our firm position and then we are going to submit it to KAI for them to determine whether that is acceptable. We cannot just let it hang for a long time. We will immediately resolve the issue,” he said.

The government plans to acquire 12 FA-50 jets from South Korea to boost the territorial defense capabilities of the Air Force. The negotiations with KAI started last July.

Earlier, Air Force chief Lt. Gen. Lauro Catalino dela Cruz said two FA-50 jets could be delivered by the end of 2014 if all the contracts and other necessary documents are signed this year.

The acquisition of FA-50 jets is one of the big ticket items in the military’s multi-billion upgrade program.
A total of P85.29-billion is needed to bankroll the program for the next four years, Defense department data showed.

Other items to be acquired were Navy frigates, ammunitions, rocket launchers, handheld radios, long range patrol aircraft, amphibious assault vehicles, anti-submarine helicopter, aerial radars, engineering equipment and base support facilities

Manalo said the government is also planning to spend P6.5-billion to buy a shore-based missile system but declined to say where it will be located.