Seoul and LM disagree over price of C-130J


Negotiations between South Korea’s arms procurement agency and a U.S. aerospace company over the sale of up-to-date military transport planes have ruptured due to a disagreement on the price of the product, industry sources said Sunday.

The failure in the projected contract of the C-130J Super Hercules ( built by Lockheed Martin) was largely due to a “miscalculation” by Seoul’s Defense Acquisition Program Administration (DAPA) of the program costs, according to sources.

“By May, the negotiations over the purchase of C-130J planes were actually broken off,” a Seoul source told The Korea Times. “The problem was that the DAPA estimated the costs for the aircraft program too low. There was a 20-percent gap between the DAPA-estimated costs and those presented by Lockheed Martin.”

“The DAPA even failed to include costs for spare parts, including extra engines, and other logistics support in its preliminary price estimation report,” he said, adding the gap was too big for Lockheed to be engaged in negotiations, said the source.

A DAPA spokesman admitted the negotiations have been protracted but said his agency was trying to seal a contract by year’s end.

The newer C-130J-30 “stretched”’ variant, with the longer fuselage, is used for various operations, including peacekeeping and special forces projection. The C-130J’s improvements include a 40-percent greater range, a 21-percent higher maximum speed, and a 41-percent shorter take-off distance.

The plane, with modern avionics and increased engine power, can carry 92 passengers, 64 airborne troops, 74 litter patients with 2 medical personnel, and two to three Humvees, or an M113 Armored Personnel Carrier.

South Korea’s Air Force currently operates a total of 12 older C-130H planes, whose relatively small capacity and short operational range have often restricted the service’s overseas airlift operations.

The DAPA plans to procure about 10 C-130Js by 2016 in stages.



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