The Defense Acquisition Program Administration (DAPA) will sign a contract with Korea Aerospace Industries (KAI) early next week to continue development of the nation's first indigenous fighter jet, officials said Thursday.
The contract comes after the U.S. government approved the transfer of 21 technologies used in Lockheed Martin's F-35 stealth fighter to Korea. These technologies will be crucial to the jet's development.
"Negotiations between DAPA and KAI have proceeded well," said a DAPA official, on condition of anonymity. "The contract is expected to be signed around Dec. 28."
The KF-X project is aimed at developing fighter jets equipped with state-of-the-art aviation electronics equipment by 2025 to replace the Air Force's aging fleet of F-4s and F-5s.
The formal contract reportedly includes the production of six prototypes by 2025.
KAI, the nation's sole aircraft maker, was selected as the preferred bidder for the project over Korean Air in March this year.
DAPA and the company have been engaged in negotiations regarding performance, cost and schedules for the project, said the official.
Developing the fighter is estimated to cost 8.5 trillion won, with an additional 10 trillion won needed to produce 120 jets by 2032.
The official said that the formal contract will be based on a tentative deal signed between KAI and Indonesia on Nov. 22, under which the Southeast Asian country will pay 20 percent of the total cost for the project.
Under the deal, Jakarta will invest some 1.7 trillion won in the project and will participate in the process of design and component production. It will also acquire one prototype and technology data afterward.
DAPA said it is stepping up efforts to push ahead with the program as scheduled, including launching a task force on Jan. 1 that will manage the program. The task force will be composed of some 70 to 80 people with its head selected from outside experts, the official said.
On Nov. 30, the U.S. agreed on transferring the 21 technologies in a "large frame," setting the stage to kick-start the stalled program.
The announcement of the signing of the formal contract and the latest agreement between Seoul and Washington appeared, to some extent, to ease mounting skepticism regarding the project.
Skepticism about the feasibility of the KF-X program deepened after the U.S. government refused in April to allow Lockheed to hand over four core technologies, including the active electronically scanned array radar, to Korea for security reasons.
A transfer of a total of 25 technologies was included in an offset deal with Lockheed in return for Korea's purchase of 40 F-35s, signed in September last year.
Such skepticism even led to calls to take the KF-X program back to square one and cancel the F-35 deal, if necessary.
However, some critics still voice concerns about the U.S.' possibly withholding some of the technologies, while DAPA and Lockheed are planning to hold additional negotiations to list in detail the technologies that Korea needs to receive because of the hundreds of technical components in the 21.
Follow Jun Ji-hye on Twitter @TheKopJihye