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Jakarta Post

To buy or not to buy: Tech transfer is the answer for Typhoons

  • Novan Iman Santosa

    The Jakarta Post

Jakarta   /   Mon, July 27, 2020   /   08:57 am
To buy or not to buy: Tech transfer is the answer for Typhoons This file photo taken on July 24, 2004 shows the Eurofighter Typhoon taking off on the first public day at the Farnborough Airshow, south west of London. British military equipment maker BAE Systems said it plans to cut almost 2,000 jobs, as the group faces weaker demand for Hawk and Eurofighter Typhoon fighter jets. Most of the cutbacks -- up to 1,400 positions -- will be shed to (Agence France -Presse/Carl De Souza)

The Defense Ministry’s plan to buy 15 second-hand Eurofighter Typhoons from Austria may provide a two-pronged benefit to Indonesia. Not only will the jet fighters increase the country’s military capabilities and deterrence, they will also open up opportunities for its defense companies, both state-owned and private.

Defense Minister Prabowo Subianto sent a letter dated July 10 to his Austrian counterpart Klaudia Tanner offering to buy the heavy jet fighters, just four days after the United States cleared Indonesia’s purchase of Bell Boeing MV-22 Osprey tiltrotors and related equipment worth some US$2 billion.

The ministry’s spokesman, Brig. Gen. Djoko Purwanto, said the planned purchase had been thoroughly researched. “Everything is studied and selected before the government issues a formal purchase offer,” Djoko said during a press conference on Thursday.

Lawmakers and observers were quick to slam the plan, saying it would violate Law No. 16/2012, which says priority should be given to domestic defense companies in the procurement of tools for its primary weapons system (Alutsista). President Joko “Jokowi” Widodo also directed officials in November last year not to purchase “obsolete and outdated weapon systems”.

Should the plan materialize, it will not be the first for Indonesia.

In 1980, the country bought 32 Douglas A-4E and T-A4 H Skyhawk attack jets from Israel in cloak-and-dagger fashion. The official explanation was that Indonesia procured the jets from the US, which bought them from Israel after they were decommissioned. Indonesian pilots, however, were sent to an Israeli air force base codenamed “Arizona” for training.

More recently in 2011, Indonesia chose to buy 24 used F-16 C/D Block 25 jet fighters and upgrade the engines and avionics with a cost of some $600 million over six brand new F-16 C/D Fighting Falcon Block 52 jet fighters worth around $430 million.

The upgrades increased the Block 25s’ capabilities to levels closer to those of the Block 52.

The decision allowed the Indonesian Air Force to form a second F-16 squadron in Pekanbaru, Riau. The first squadron is located in Madiun, East Java, which flies the much older F-16 A/B Block 15.

Having a second squadron means there is more presence in the vast Indonesian airspace, as more F-16s are available and more pilots can fly to hone their skills.

Such an approach can be adopted for Austria’s Typhoons, which originally belonged to Tranche 1 that focuses more on air defense missions. The consortium producing the Typhoon, Eurofighter Jagdflugzeug GmbH, has provided upgrades to tranches 2 and 3, which greatly improves the jet fighter’s ground attack capabilities.

If Indonesia receives approval from Germany, Italy, Spain and the United Kingdom, which design and produce Typhoons, it could then request an upgrade package involving Indonesian companies and manpower.

The House of Representatives Commission I overseeing defense, foreign affairs and information warned the plan could violate Law No. 16/2012 on the defense industry, which requires foreign acquisitions to include counter trade, local content and offset (IDKLO) provisions that account for 85 percent of the acquisition value.

The law defines local content as components (hardware and software), intellectual property rights, engineering, man hours, customer support and training provided by Indonesian individuals or companies. Offset is defined as an agreement to return some part of the contract value in the form of coproduction, joint ventures, buybacks, knowledge transfers or training.

The Typhoon purchase could fulfil the legal requirement so long as the Defense Ministry can negotiate hard for an upgrade package that not only greatly improves the Typhoons’ capabilities but also those of Indonesian defense industry.

The ministry, for example, could require a system for naval missions to be developed together, considering Indonesia’s vast exclusive economic zone.

In addition to state-owned aircraft manufacturer PT Dirgantara Indonesia (PT DI) as the lead integrator, the upgrade package could also involve other companies, such as state-owned electronics maker PT LEN Industri and several private defense electronics companies.

Lawmakers also insist that the government should be more committed to the joint jet fighter production program with South Korea, in which Indonesia holds a minority share of 20 percent. Indonesia joined the $8 billion project in 2010.

Korean Aerospace Industries (KAI) is working with PT DI to design and manufacture the jet fighter, with Indonesia projected to buy 48 aircraft and South Korea projected to buy 120.

A prototype of the jet fighter, however, will only appear in 2021 and its first flight is scheduled for 2022, The Korea Herald reported on July 8. Mass production is expected to start between 2026 and 2028, the Herald added.

The acquisition of Typhoons would, therefore, provide the Indonesian Air Force with increased capabilities until Indonesia’s first batch of KFX/IFX jet fighters arrive in the next decade.

The know-how acquired in upgrading the Typhoon systems would also provide great experience for Indonesian defense companies, thus preparing them to upgrade the KFX/IFX jet fighters once they are operational.

Typhoons will also provide much-needed capabilities until the $1.1 billion purchase of Russian Su-35 Flanker Es, which may enrage the US, materializes. Both Flankers and Typhoons are heavy jet fighters that perform similar roles.

With the Austrian Typhoons still having some 20 years left in their lifecycle, an expedient negotiation and delivery could greatly increase the Indonesian Air Force’s capabilities and deterrence.

By providing support to local defense companies to upgrade the Typhoons, and by extension possibly supporting the KFX/IFX program, the government is making good on its own word to prioritize local defense companies.

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Staff writer at The Jakarta Post