FA-50 Negotiations Completed

The Philippines and South Korea completed on Friday the negotiations for the acquisition of 12 lead-in fighter trainer jets from South Korea.

The Department of National Defense Special Bids and Awards Committee 1 led by Defense Undersecretary Fernando Manalo approved the offer of the supplier, Korean Aerospace Industry (KAI), in a meeting in Camp Aguinaldo.

Manalo said the completion of the negotiations would pave the way to the signing of the contract for the P18.9-billion project.

Payment Scheme Approved

Malacañang has approved the payment scheme for the purchase of 12 lead-in fighter trainer jets from South Korea, taking the deal to acquire the air assets a step closer to completion.

The defense department has been allowed to make an advance payment of 15 percent of the total contract price to South Korean firm Korean Aerospace Industries (KAI).

The project has an approved budget of P18.9 billion and is one of the big-ticket items in the military’s upgrade program.

Malacañang has also granted the defense department’s request to tap a progress payment scheme, wherein the government will pay the supplier on a mutually-agreed upon schedule.

The approval of the payment scheme was contained in a memorandum signed by Executive Secretary Paquito Ochoa Jr. on Feb. 13.

Defense Undersecretary Fernando Manalo confirmed the approval of the payment scheme for the multibillion-peso project.

The government will be spending P18.9 billion for the jets to boost the country’s territorial defense capabilities.

It will also spend P135.99 million for the basing support systems of the jets.

Under the approved scheme, the government will deliver payments upon completion of certain “milestones” or progress related to the construction of the jets.

Earlier, Defense Secretary Voltaire Gazmin said the delivery of the jets could start in June 2015.

Another issue that was settled was the turnaround time, the period required for the delivery of the jets’ spare parts under a two-year warranty.

It usually lasts 30 to 45 days but KAI initially wanted it prolonged it to 180 days. Both parties have agreed to 60 days.