Indonesia is now obliged to pay South Korea $1.35 billion (1.6 trillion won), down by nearly $85 million (100 billion won) for their joint KF-X fighter jet development project.
Defense Acquisition Program Administration (DAPA) announced the change on Monday after it concluded years of negotiations with Indonesia last week on a cost-sharing deal.
South Korea cut Jakarta’s dues as the warplane has been designated as "defense goods" eligible for a tax exemption. The total cost of the project is around $6.5-7 billion and Indonesia has agreed to shoulder 20% of it. The country will do make in-kind payments for 30% of its share. DAPA says details of this will be hammered out later.
DAPA officials told Yonhap that the two sides will have additional consultations on a detailed plan concerning how and when Indonesia will make its overdue payments for the defense project, which currently stand at around $678 million (800 billion won).