Boeing misses out on $9.7b S. Korea jet deal, bidding to restart

SEOUL (REUTERS) - South Korea voted against Boeing's F-15 Silent Eagle in its 8.3 trillion won (S$9.7 billion) tender for 60 fighter jets, the country's arms procurement agency said on Tuesday, saying it would restart the bidding process.

The decision on the country's biggest arms purchase programme was a blow for Boeing, which had submitted the only bid out of three that was under-budget and hence eligible to win under South Korean law.

It competed against Lockheed Martin's F-35A and the Eurofighter consortium's Typhoon.

"DAPA...will swiftly pursue the programme again in order to minimise the vacuum in combat capabilities," South Korea's Defense Acquistion Program Administration (DAPA) said in a statement.

The long-delayed auction was mired in controversy after a number of former air force chiefs complained that Boeing's F-15 Silent Eagle lacked the vital stealth capabilities present in modern fighters.

South Korea will restart the bidding process from a clean slate.

The defence ministry said it would take around one year to complete the new tender round.

DAPA had earlier estimated that any delay in the tender process could leave the South Korean air force 100 fighters short of the 430 jets deemed necessary by 2019.

Given delays that pushed back first delivery by three years to 2017, and a total budget fixed without wriggle room, top decision-makers had been keen to buy jets as soon as possible to partially replace ageing F-4 and F-5 fighters and maintain combat capabilities.

The collapse of the deal, however, means a fresh start to Lockheed Martin's costlier F-35A that lost out due to its over-budget bid.

Netherlands recently brought the number of countries with firm commitments to purchase the F-35 to seven after Britain, Australia, Italy, Norway, Israel and Japan also placed orders.