South Korea's on/off development of the Samsung/ Lockheed Martin KTX-II advanced-trainer/light-combat aircraft is again facing the threat of delay, as the country's defence ministry conducts an across-the-board review of military expenditure.
Seoul is cutting the 1998 defence budget by 10% after the International Monetary Fund's (IMF) recent $57 billion bail-out of the financially stricken South Korean economy. Defence-equipment expenditure has been further eroded by an 84% slide in the value of the South Korean won against the US dollar in the past six months.
"This is making it very difficult for South Korea to embark on any new programmes, such as the KTX-II," says a local defence official. Options proposed include an outright cancellation of the programme, a 12-month deferment, or stretching out the planned 12-year development and production schedule.
No final decision is expected before March, by which time South Korean president-elect, Kim Dae Jung, will have been inaugurated and a new defence minister appointed. Further KTX-II progress payments are due by March.
Phase two of design and development work has been under way since late 1997. Lockheed Martin has begun work at Fort Worth, Texas, and has seconded personnel to South Korea's Sachon research-and-development centre, as part of its 13% stake in the programme. General Electric was also recently awarded an initial $50 million contract to develop a version of the F404-402 engine for the aircraft
There are also questions being asked about Samsung's ability to finance its 17% share of the $1.8 billion programme. A rise in interest rates, a squeeze on credit and pressure from the IMF and Government to restructure is forcing it to reconsider any new investments.
South Korea, meanwhile, is set to defer until at least 1999 any funding for airborne-early-warning aircraft. Contenders Boeing and Israel Aircraft Industries are proposing E-767-based solutions.
Source: Flight International
