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MANILA, Philippines – The Philipppines completed negotiations with Korea Aerospace Industries Ltd (KAI) on Friday, February 21, for 12 FA-50 fighter jets worth P18.9 billion.
“We’re not just inching closer. We are almost there,” Defense Undersecretary for finance Fernando Manalo told reporters.
The final signing is expected next month. Based on the timeline of the Department of National Defense, the first 2 fighter jets will be delivered by September 2015 or 18 months after the signing. A total of 4 fighter jets will be delivered under the term of President Benigno Aquino III.
As territorial disputes intensify in the region, the FA-50 is meant to build the fighter capability of the Air Force after it retired the last of its US-designed F-5 fighters in 2005.
Strictly speaking, the FA-50 is a lead-in fighter trainer aircraft but there are those who consider it a fighter jet because of its minimum fighter capabilities.
“We are considering it as not just an ordinary lead in fighter because it can deliver short range missile and there is a potential for these to be classified as beyond the short range fighter aircraft,” explained Manalo, a former Air Force general.
The KAI web site describes the FA-50 as a “light combat derivative of the T-50 supersonic advanced jet trainer.”
It can carry 4.5 tons of weapons including air-to-air and air-to-surface missiles, machine guns, and precision guided bombers among others. It is also equipped with Night Vision Imaging System (NVIS), Radar Warning Receiver (RWR), and the Counter Measure Dispenser System (CMDS).
It’s a government-to-government contract that was stalled because of issues with the payment scheme. KAI was initially asking a 52% downpayment for the capital intensive project. Malacañang could only agree to pay a 15% advance payment and settle the balance through a progressive payment. The South Korean company yielded.
The Philippines will pay in US dollars, taking the risk of foreign exchange fluctuations.
KAI also agreed it will not charge the Philippines additional costs if the furnish equipment – including navigation equipment it will source from US – will exceed the approved budget of US$5.93 million. Additional costs will be shouldered by KAI.
The Philippines, on the other hand, agreed to adjust the contract to reduce spares by US$500,000 or P22 million. Fernado argued it is “negligible” for the multi-billion project.
The FA-50s project is one of 2 big ticket items in the P85 billion revised Armed Forces Modernization Program. The other major item is the P18 billion project for 2 frigates. The two items make up about 40% of the fresh funds.
“This is a very important project together with the frigate of the navy because we are almost there. We are about 20% of our objective to have a minimum credible defense capability for our armed forces,” said Manalo.
The bidding process is still ongoing for the frigates.
BRP Gregorio Del Pilar and BRP Ramon Alcararaz are currenlty the Navy’s most capable warships. They were recently acquired from the US Coast Guard to patrol the West Philippine Sea. (READ and WATCH: Maiden voyage of PH’s most capable warship)
Naval helicopters will also arrived last year to expand the monitoring capability of the warships.
The 2 brand new frigates will be more capable than Alcaraz and Del Pilar. It will be capable of submarine warfare and will be able to carry missiles. — Rappler.com
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