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(3rd LD) Indonesia picks S. Korea as preferred bidder for trainer jet project

All Headlines 17:32 April 12, 2011

(ATTN: ADDS KAI CEO's quotes, details, photo in last 6 paras)

SEOUL, April 12 (Yonhap) -- Indonesia has selected South Korea's state-run aircraft maker as the preferred bidder for its trainer jet project, an official said Tuesday, paving the way for Seoul to export T-50 trainer jets to the Southeast Asian nation.

Indonesia notified a Korea Aerospace Industries (KAI) official in Indonesia on Tuesday afternoon that South Korea's sole aircraft maker won the preferred bidder's status for the trainer jet project, presidential spokeswoman Kim Hee-jung told reporters.

The two sides also agreed in principle to conclude a memorandum of understanding on the deal within nine months, another government official said.

"After the preferred bidder designation, we will be holding full-scale negotiations with the Indonesian government on specifics, such as prices for the T-50," the official said.

A final deal, if sealed, would mark South Korea's first export of the T-50 "Golden Eagle."

South Korea reportedly plans to export 16 T-50 jets worth a total of about US$400 million.

The KAI's designation as a preferred bidder means that it will have exclusive negotiating rights for the Indonesian project for a certain period of time, boosting the chances of the firm winning the final contract.

South Korea first unveiled the T-50 in 2005 after the KAI developed the supersonic jet jointly with U.S. defense giant Lockheed Martin, making the country the world's 12th supersonic jet producer.

Seoul has tried to export the jet to Indonesia as Jakarta plans to replace its aging Hawk Mk-53 trainer jets that are scheduled to be decommissioned this year.

Indonesian media had reported earlier that the country's air force will purchase 16 T-50 jets.

Last month, Indonesian Air Force Commander Marshall Imam Syafaat made a three-day trip to South Korea that included a tour of plants that build the T-50 trainer jets.

In December, South Korean President Lee Myung-bak visited Indonesia and agreed with Indonesian President Susilo Bambang Yudhoyono to cooperate closely in such defense industries as trainer jets and submarine production.

"More than anything else, you would also agree that the special friendship between President Lee Myung-bak and Indonesian President Yudhoyono played a big role" in this, presidential spokeswoman Kim said.

If the negotiations with Indonesia go well and KAI wins a final contract, the South Korean company would be able to deliver the T-50 jets to Jakarta by 2013, said KAI chief executive Kim Hong-kyung.

"A deal with Indonesia would make South Korea the world's sixth exporter of supersonic aircraft after the U.S., Russia, Britain, France and Sweden," the KAI CEO told reporters in a separate press briefing at the defense ministry.

Kim said the value of the deal would be adjusted, depending on the results of the negotiations that will begin within one or two months.

Indonesia's decision to choose South Korea as a preferred bidder was "meaningful" for Seoul's aircraft industry, as the T-50 jet beat rivals such as Italy's M-346, Russia's YAK-130 and the Czech Republic's L-159, he added.

The decision also brightened the prospects for future exports of the T-50 jets, Kim said.

"We are currently in consultations with Israel and Poland to explore a possible sale of the T-50," Kim said.



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