Rupture of Final Price Negotiations in Next Generation Flight

The final price negotiations for buying 40 multi-purpose and high capacity next generation fighters (FX) were called off.

It would have cost 4200 billion.

But heads of the Defense ministry are showing strong will for acquiring FX fighters. Therefore, its promotion appears likely to continue if they reduce the purchasing amount, option of parts, or secure additional budget.

Kim Dong-Shin, the Minister of Defense made clear the intention to continually promote the purchase without concern about the price at a press conference on the 4th, saying, "FX business will be promoted according to the plan and I consider that alliance is important, although the price is also important."

The Ministry of Defense specifies the reasons why FX business cannot be delayed or nullified: r Vacuum in air power in the Air Force, r Degradation of International credibility, r Possibility of financial burden following delay.

One high-ranking officer of the Defense Ministry said, "We executed the final third price negotiation in succession with the first and second, but the price offered by 4 foreign companies did not reach the target price of the Defense Ministry and it was called off because enterprises resisted saying that they gave the best price, and the price wouldn`t go down."

Another official stated, "We will examine the result of price negotiation and finally decide the possibility of FX promotion by this week." and "if it is judged due to the result of examination that the promotion is possible, we will decide kinds of airplanes according to evaluation standard."

He also commented, "Now is the time for deciding what kind of airplanes we want. The budget is a secondary issue after deciding the kinds of airplanes, and is not a big worry at this moment."

Dong-Ki Sung esprit@donga.com