Monday, March 24, 2014, 14:25
Seoul to buy 40 F-35 jets for US$6.8 billion
By Reuters

 Seoul to buy 40 F-35 jets for US$6.8 billion
The fourth US Air Force F-35A Lightning II aircraft arrives at the 422nd Test and Evaluation Squadron at Nellis Air Force Base, Nevada in this April 24, 2013 file photograph released by the US Air Force on May 8, 2013. (Photo / Reuters)

SEOUL - The Repuclic of Korea (ROK) expects to pay around 7.34 trillion won ($6.79 billion) for 40 Lockheed Martin jets, two sources with knowledge of the matter said on Monday, as Seoul boosts its air defences amid simmering tensions in the region.

ROK also confirmed plans to buy four Northrop Grumman Global Hawk unmanned aircraft to monitor the Democratic People's Republic of Korea (DPRK). The drones will cost about 880 billion won and will be delivered starting 2018, one of the sources said.

The defence deals also come as ties between Japan, China and ROK have chilled over the past year, and the region's three powers look to beef up their defensive capabilities.

Seoul's arms procurement agency reported the estimated budget of around 7.34 trillion won to buy the radar-evading F-35s plus support systems to a committee overseeing military purchases earlier on Monday, the second source said. The sources declined to be identified as they were not authorized to speak to media.

ROK says the F-35 deal will be finalised in the third quarter, with the first delivery in 2018.

The budget has received the final approval of the finance ministry, Defense Acquisition Program Administration (DAPA) spokesman Baek Youn-hyeong said.

Lockheed said in a statement it welcomed ROK's announcement and it would support discussions between Seoul and Washington to finalise the order this year.

ROK decided to redraw the terms of a 8.3 trillion won tender to buy 60 fighters last year after dropping an option to buy Boeing Co's F-15s in favour of purchasing a fighter with stealth capabilities.

In December, Seoul reduced the purchase to an initial 40 jets.

"Lockheed Martin agrees ... that the cost of the F-35 is on a downward path that will lead to a Unit Recurring Flyaway (URF) cost for an F-35A of between $80-85 million," said Randy Howard, Director of Lockheed Martin's F-35 Korea Business Development in an emailed statement last week.

ROK was the eighth largest importer of major weapons in the world between 2009 and 2013, with 80 percent of the imports supplied from the United States, according to think tank Stockholm International Peace Research Institute (SIPRI).