Indonesia proposes cutting payments for S.Korea fighter jet project, Yonhap reports

SEOUL (Reuters) - Indonesia has proposed to cut its share of payments for a joint fighter jet development project with South Korea to about one-third of the originally agreed amount, South Korean news agency Yonhap reported on Monday.

Indonesia recently suggested to the South Korean government that it would pay about 600 billion won ($442.47 million) for the KF-21 joint fighter jet project, Yonhap reported, citing multiple unnamed government sources.

The original amount due for Indonesia's share of the joint fighter project was set to be at about 1.6 trillion won by June 2026, the report said.

"In order to successfully complete the development of the KF-21 system, the governments of both South Korea and Indonesia are conducting final negotiations to resolve the current cost sharing issues," South Korea's Defense Acquisition Program Administration said in a statement to Reuters.

Indonesia's defence ministry did not immediately respond to a request for comment.

The KF-21 fighter jet developed by Korea Aerospace Industries (KAI) in a project partially backed by Indonesia is designed to be a cheaper, less stealthy alternative to the U.S.-built F-35, on which South Korea relies.

Indonesia said it would receive fewer technology transfers from South Korea as part of its move to cut its financial contribution, Yonhap reported.

South Korea and Indonesia resolved in 2022 a dispute over funding for the joint fighter jet project worth more than 8 trillion won after Indonesia had halted payment of its 20% share of the development costs.

The Indonesian government's latest proposal comes after South Korea police raided KAI's head office in March in connection with two Indonesian nationals accused of leaking technology related to the KF-21 fighter jet project.

($1 = 1,356.0200 won)

(Reporting by Heekyong Yang in Seoul and Stanley Widianto in Jakarta; Editing by Jamie Freed)