S. Korea to delay contractor selection for air tankers: sources

By Oh Seok-min

SEOUL, Nov. 23 (Yonhap) -- South Korea's selection of an overseas final bidder for aerial refueling tankers might be delayed until at least early next year due to gaps in offsets of defense trade terms, official and industry sources here said Sunday.

In a project worth 1.4 trillion won (US$1.26 billion) to purchase four refueling tankers, South Korea has accepted bids from plane giants Europe's Airbus, Boeing of the United States and Israel Aerospace Industries (IAI).

The bids involve Airbus's Airbus Defense and Space's A330-200 Multi-role Tanker Transport (MRTT), Boeing's B767-200ER KC-46 and IAI's B767-300ER Multi-Mission Tanker Transport (MMTT).

Though the country's arms procurement agency, the Defense Acquisition Program Administration (DAPA), said it had set a goal to choose the winner by the end of November, its officials admitted to time constraints.

"The two sides are still divided in terms of offsets in this trade, though they've almost adjusted the prices," a DAPA official said on the condition of anonymity.

Offsets in defense trade encompass a range of industrial compensation arrangements required by foreign governments as a condition of the purchase of defense articles and services from a non-domestic source.

DAPA spokesman Kim Si-cheol also said, "it is true that the schedule is too tight, though negotiations are in the final stage."

"Finalizing the deal itself within the targeted deadline is not of primary importance. We are trying to get the best result so as to maximize national interests," he said, stressing the agency's efforts to push for the project as planned to put the tankers into service between 2016 and 2019.

Though DAPA has been trying to put the item on the country's defense project committee at an early possible date for approval, chances are that the selection process would be postponed until next March or April, according to a source from the defense industry well versed in the issue.

"Negotiating with three companies will take time. One trivial but at the same time crucial factor here is that many workers in Europe and the U.S. are on vacation well into the beginning of the New Year," the source said.

The use of tankers allows the fighter jets to stay airborne for an extra hour and carry more weapons. The greater payload is made possible because the jets can take off with less fuel, thereby lightening their weight.

graceoh@yna.co.kr
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