Negotiations for the acquisition by the Philippine Air Force (PAF) of 12 Korean-made lead-in fighter jets worth a total P18.9 billion have stalled over “issues” of downpayment and the warranty and delivery of spare parts.
On Monday, Undersecretary Fernando Manalo, head for Finance, Munitions, Installations and Materiel, summed up the problem thus: “There are major issues, several issues that we still have to [resolve]. The negotiation is still not finished.”
According to Manalo, manufacturer Korean Aerospace Incorporation (KAI) is not keen, for one, to accept the Philippine government’s terms to deliver spare parts within 30 to 45 days upon receipt of notice. The Koreans want the time stretched to 180 days.
“The turnaround time, our standard turnaround time is between 30 and 45 days upon receipt of the notice of the proponent and that the warranty is still valid. They have to deliver the spare parts so we can immediately replace the defective spare parts. I think the warranty is two years or 600 hours whichever comes first. Hindi nagkakasundo ‘yung partido, medyo mas mataas yung gusto ng KAI [The parties can’t agree, the KAI wants a longer stretch], 180 days,” he said.
Parties are also still dead locked over the terms of payment, with KAI seeking a “52-percent advance payment,” and the Philippine side pitching lower.
Manalo declined to discuss the reported manufacturer’s proposal to fix the Peso-Dollar exchange rate to $USD45.
Defense Secretary Voltaire Gazmin had convenedc last Nov. 6 a “senior defense officials meeting” to tackle KAI’s proposal, but apparently the snag was not resolved.
The senior officials thus decided to elevate the issue to the Office of the President, sources said.
Manalo explained, meanwhile, that Philippine law allows a down payment of only 15 percent. With the balance upon delivery. “The Bids and Awards Committee cannot approve [something that is not decreed by] Republic Act 9184. Outside RA 9184, we have to elevate it to the Office of the President.”
Still, he said, some options were open. For one, “we can only recommend to the President na pagbigyan kasi [to grant their request because] you can imagine the value of the budget is P18.9 billion at ang malaking portion ng 18.9 ay i-invest na kaagad sa umpisa pa lang [and the bulk of the P18.9 billion is invested right away from the start],” he added.
As a result of the disagreements, the Department of National Defense is uncertain if the aircraft deal can be inked this year.
Urgent need for planes
Manalo, at any rate, sees it pushing through, noting the urgency of the need: “[We need this]. We’ve to establish a fighter capability and we have to go through this lead-in fighter aircraft. It will take five years before we develop the capability. Sothis project must be consummated.” Still, he added, the urgency cannot trump the need to make sure the deal is advantageous to government; and to make sure the planes that are bought will not be idled for long periods for lack of spare parts or failure of timely delivery.
The aircraft will be used for security patrols in Philippine airspace, especially in the West Philippine Sea (WPS) where
The production of the FA50 was a joint-venture of South Korea Lockheed Martin of the
President Aquino officially announced in October the acquisition of the jets during his visit in
In his 4th State of the Nation Address (SONA) in July, Aquino hinted he was not inclined to buy jets and would rather use the billions of pesos for poverty alleviation.
http://www.interaksyon.com/article/76061/ph-plan-to-buy-12-korean-lead-in-jets-stalls-on-issues-of-downpayment-spare-parts-delivery
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