By Lee Tae-hoon
Indonesia will likely pick Korea as the preferred bidder for its submarine acquisition program, worth $1.08 billion, industrial sources said Thursday.
“France has been practically eliminated from the race,” an official of Korea's Daewoo Shipbuilding and Marine (DSME) said, asking for anonymity.
He said once the deal is sealed, Korea's Daewoo Shipbuilding and Marine will be selling three 1,400-ton submarines to the Southeast Asian country.
The official said the two other bidders, Germany and Russia, were pulled out of the race in March this year for failing to meet the Indonesian Navy’s requirements.
“From April, Indonesia only invited Korea and France to make presentations, automatically disqualifying Germany and Russia” he said.
Son Hyeong-yeong, spokesman of the state-run Defense Acquisition Program Administration, confirmed that Korea has offered to export three submarines to Indonesia.
“If Korea wins the bid, two of the submarines will be manufactured here, while the remaining one will be assembled in Indonesia with key components produced in Korea,” he said.
Son, however, denied the media report that Taufik Kiemas, the speaker of the Indonesian People's Consultative Assembly, told Prime Minister Kim Hwang-sik Wednesday that DSME is certain to win the project.
“None of the officials and the reporter present at the gathering between Kiemas and Kim heard submarines mentioned in the discussions,” he said.
Son noted that Korea has yet to receive any formal notification from Indonesia concerning its preferred bidder status.
Senior defense officials say the Indonesian and Korean governments are waiting to announce the result until Defense Minister Kim Kwan-jin pays a visit to Indonesia in September.
Korea and Indonesia have seen an increase in bilateral defense exchanges since the leaders of the two countries have made motions to jointly develop weapons and boost bilateral trade.
President Lee Myung-bak and his counterpart Susilo Bambang Yudhoyono agreed in December last year to seek joint development of weapons and defense technologies, including tanks, submarines and trainer jets.
In May, Korea Aerospace Industries (KAI) signed a deal to export 16 T-50 jets worth $400 million to Indonesia. Korea's 10th biggest trade partner with their bilateral trade volume estimated at $22.9 billion in 2010.