Sections

ideals
Business Essentials for Professionals

GE Clinches Deal for Supplying Engines for South Korea’s Homegrown Fighter Jets


05/26/2016


GE Clinches Deal for Supplying Engines for South Korea’s Homegrown Fighter Jets
The US electrical giant General Electric Co has won a deal that could be worth an estimated $3.5 billion over a European consortium to supply engines for its homegrown KF-X fighter jet project for South Korea.
 
South Korea is in a process to develop its own fighter jets to reduce its heavy reliance on the U.S. military for air defense and is investing millions of dollars and the decision which was announced on Thursday by the country's arms procurement agency marks the latest step in Seoul's plans.
 
The 18 trillion won ($15.3 billion) project calls for building 120 locally made twin-engine combat jets and European engine maker Eurojet Turbo GmbH and GE had been vying to become the engine provider. 
 
With a contract expected to be finalised and signed in June, the move gives GE preferred bidder status. South Korean media have estimated the deal could be worth about 4.08 trillion won even as no financial details were disclosed in the announcement.
 
Last year, Korea Aerospace Industries Ltd (KAI), which partners with Lockheed Martin Corp was picked by South Korea's Defense Acquisition Program Administration for the development of the 8.7 trillion won ($7.4 billion) KF-X jet project.
 
Separated by the world's most heavily militarized border, North and South Korea are in a technical state of war since their 1950-1953 conflict ended in a truce and not a peace treaty.
 
Seoul wants to replace its aging jet fleet of F-4s and F-5s and aims to deploy the new planes starting in the mid-2020s.  The DAPA had earlier said that is would come up with a detailed design for the planes by January 2019 after it finalizes the basic designs by September next year.
 
Domestic defense manufacturer Hanwha Thales was selected last month a preferred bidder to produce an advanced radar system to be installed onto the fighter jets by the DAPA as part of its efforts to push for the project.
 
A person with knowledge of the matter told Reuters that the KAI plans to develop and produce 170 twin-engined jets initially, with 50 destined for export to Indonesia.
 
If KAI successfully exports the KF-X to other countries seeking a relatively cheaper replacement for their U.S.-supplied jets, it could lead to more engines being sold by South Korea.
 
Over a rival bid to supply Eurojet EJ200 engines, made by a consortium that includes Rolls-Royce Holdings PLC and MTU Aero Engines AG, F414-GE-400 engines, produced by GE Aviation was chosen by KAI to power the aircraft.
 
In all the four main criteria for the contract - technology, costs, localization and management, the GE Aviation engines scored better results than Eurojet, the DAPA said in a statement.
 
According to the DAPA, by 2022, South Korea plans to localize production of parts of the KF-X engines.
 
(Source:www.reuters.com &www.koreaherald.com)