South Korea chose a state-run aircraft maker on Monday as the sole preferred bidder for a contract to develop a midlevel fighter jet with the help of Lockheed Martin Corp. in the country's biggest-ever weapons development project.
The deal worth $7.8 billion is only for system development and the production of prototype jets by 2025. South Korea eventually plans to introduce 120 such fighter jets to replace its aging fleets of F-4 and F-5 fighter jets, according to Seoul's Defense Acquisition Program Administration.
The procurement agency said in a statement the Korea Aerospace Industries beat Korean Air Lines to become the preferred bidder. The statement said it will negotiate with the KAI about detailed terms for the contract with the hopes of launching the development in the first half of this year.
Lockheed Martin, which last year won a multibillion-dollar deal to provide 40 F-35A fighter jets to South Korea, is to provide technology transfer and other helps for the jet development project, agency officials said.
South Korea has traditionally favored importing fighter jets and other weapons from the U.S., a key ally that stations about 28,500 troops in the South as deterrence against potential aggression from North Korea.
The Korean Peninsula remains in a technical state of war because the 1950-53 Korean War ended with an armistice, not a peace treaty.