November 07, 2014 12:13
The government has canceled an upgrade contract for the KF-16 fighter jets with the BAE Systems of the U.K. after costs spiraled out of control.
Kim Shi-cheol, a spokesman for the Defense Acquisition Program Administration, told reporters, "The U.S. and Korean governments discussed the matter and informed BAE Systems of the decision. He claimed the contract was not canceled but "temporarily halted," but it is unlikely to be revived.
The project involves upgrading the radars, mission computers, and weapons systems of 134 KF-16 fighter jets currently in use by the Air Force. The project was to cost W1.75 trillion (US$1=W1,086).
BAE Systems won the contract in 2012, but the U.S. government, which is the guarantor of the deal, demanded an additional W500 billion to cover the costs of risk management and the British defense contractor quoted an extra W300 billion due to delays.
A BAE spokesman said the company is "disappointed" by the decision.
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